PAYDAY lender Shelby Finance has apologised to customers and written off £500,000 of loans after failing to provide statements to borrowers.
The Competition and Markets Authority (CMA), which checks that companies are behaving fairly, found that Shelby hadn’t provided borrowing summary statements to more than 15,000 customers.
These statements are meant to help borrowers manage their money because they set out information including how much interest or fees they are expected to pay and when their next payment is due.
This information can also help customers shop around for a loan that best suits their needs.
Lenders are required to send these statements by law, but the CMA found Shelby Finance failed to do so between August 2018 and July 2019.
The CMA said that because research shows that payday lenders are often used by more vulnerable customers, it was concerned about the impact the breach might have had.
Shelby Finance has agreed to write off loans worth £527,863 for around 700 of the customers affected.
These people had their loans written off because Shelby was unable to provide the borrowing summaries it had missed.
For the other affected borrowers, Shelby sent late summaries of borrowing by email and made previous summaries available online.
These customers will not receive any compensation for the breach, the CMA said.
Shelby has also apologised and put measures in place to make sure the same problem does not happen again.
The CMA will continue to monitor its progress and may take formal enforcement action if further breaches take place.
Alistair Thompson, director of remedies, business and financial analysis at the CMA, said: “The summaries we require payday lenders to send to customers are crucial in helping borrowers make informed decisions about their loans.
“While it is disappointing to see so many customers not being properly informed, Shelby Finance’s commitment to writing off £500,000 in loans will help put this right.
“We will continue to monitor the situation and will take further action if needed.”
In February, TSB announced it would offer short term loans to help customers who would otherwise dip into overdrafts or use payday loans.
Meanwhile, payday loan firm Sunny went into administration at the end of last month.
Rival firm Peachy has also collapsed this year.