H&T Pawnbrokers has said it will refund customers more than £2 million after a loan investigation found more than one in 10 should never have been made. The company said it had 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.
These 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."
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.
The business said that it would pay £1.6 million directly to customers in redress 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.
"Customers whose loan should not have been granted and who are due redress, will be contacted directly and we will endeavour to complete the redress programme as quickly as we can, so as not to prolong the uncertainty further," Mr Gillespie said.
"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."
