Pawnbroker H&T is set to refund more than £2 million to customers who were unable to repay their loans.
The news comes after an investigation by the company found that one in 10 loans should never have been given in the first place, and the people who were granted them will be given compensation.
H&T, which has nine shops in the North East, including Grainger Street, Clayton Street and West Road in Newcastle and Blandford Street in Sunderland, looked into a series of loans given between April 2014 and October 2019 and found 9,800 loans to 8,000 customers that should have been refused.
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The company has been looking into these loans since 2019. It has now been given permission by the Financial Conduct Authority (FCA) to move ahead with a compensation scheme for customers. H&T will pay £1.6million directly to customers, and a further half a million will be available to adjust the balance of their outstanding loans. On average, each customer will get £264, H&T said.
These mis-sold loans make up about 11.5 per cent of the total, unsecured, high-cost, short term (HCST) loans the business made during the period.
"We are pleased that the review is now concluded and that the majority of HCST loans granted by H&T are considered to have been lent responsibly," said chief executive Chris Gillespie. "The board of H&T is very aware of the concerns and uncertainty that this review has caused for all stakeholders. H&T is committed to providing services which maintain the highest standards of customer care and regulatory compliance, and we have co-operated fully and constructively with the FCA throughout this review. High cost, short-term, unsecured lending no longer forms part of the group's product offering."
Have you been mis-sold a loan and can't afford to pay it back? Email catherine.furze@reachplc.com
How do I claim my refund?
If you are due money back, you should be contacted directly by H&T, who will outline the next steps of how to apply for your refund, and the company has pledged to complete the redress programme as quickly as possible, so as not to prolong the uncertainty further, according to Mr Gillespie.
How much you get back will depend on how much you borrowed and for how long. You'll likely need to show evidence that you couldn't afford your loan, so if you think you might be due money back, you should start gathering evidence of your repayments.
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