major UK payday lender Cheque Centre has agreed to stop offering lump-sum payment loans and end debt-collection phone calls, the Financial Conduct Authority said yesterday.
The watchdog said the firm which operates out of 451 branches across the UK, including outlets in Tayside and Fife was making the changes in order to meet new requirement brought in since it took over regulation of the industry on April 1.
The poor practice was uncovered by the Office of Fair Trading, the former consumer credit regulator, along with FCA staff on secondment.
In late March, Cheque Centre was sent a letter setting out the regulators’ serious concerns about its operations and the company admitted there were areas of its business that needed dramatic improvement.
The changes means Cheque Centre will no longer offer single instalment payday loans.
It has also agreed to stop calling customers struggling to repay their debts until it has demonstrated to the FCA that improvements to its practices have been made.
The FCA said Cheque Centre had also committed to retraining its staff in order to instil a customer- first culture.
“This is an early victory for people that use payday lenders,” the FCA chief executive Martin Wheatley said.
“We made our tougher expectations clear to Cheque Centre and they have wasted no time in making changes.
“I have said before that firms would need to dramatically improve their operation or exit the market, and we are now seeing that happening.”