Since 2012, the Financial Conduct Authority (FCA) in the United Kingdom has been on high alert in regards to the nation’s payday loan industry, a multi-billion-dollar business used by all kinds of people.
As part of this heightened awareness, the FCA announced Wednesday that it has prohibited a payday loan lender and its director from operating. The FCA claims the group and its director submitted evidence to the High Court that consist of documents described as a “sham” and “forged.”
Andrew Barry Hart, the owner and director of Wage Payment and Payday Loans Limited (WPPL), will no longer be allowed to work in any part of the regulated financial services industry in the UK. The FCA has ended the organization’s interim permission and has rejected its application for authorization.
The FCA wrote in a Decision Notice that “[Hart] took a reckless approach to managing the affairs of WPPL.” The FCA would go on to allude to a High Court judgment that concluded that Hart “advanced what he knew to be a false case, supported by forged or sham documents which, to his knowledge, contained false information, and he was found to have given untrue evidence.”
What this means is that the FCA has prohibited Hart based on the allegations that he is neither a fit nor proper person. Because of the paucity of integrity and competence, Hart and WPPL’s interim permission was refused. It also cited that the payday loan provider did not meet the minimum conditions pertaining to resources and suitability.
“There is no place in an FCA-regulated consumer credit market for firms like WPPL or senior managers, like Mr. Hart, who lack the requisite integrity and competence to ensure customers are treated fairly and all relevant regulatory obligations are met,” said Mark Steward, the FCA director of enforcement and market oversight, in a statement.
“We will continue to use our powers to protect consumers and tackle firms who cross the line and senior managers whose failures have caused or contributed to the firm’s failures.”
The interesting part about this case is that this is the very first ban of a payday loan senior manager due to non-compliance since the FCA began to head regulation of consumer credit a couple of years ago.
Since the global financial crisis, the UK has taken a hard line approach to the payday loan industry. The FCA has imposed stringent rules and tough regulations on the payday loan niche, and this has negatively impacted some of the biggest and smallest loan companies in the industry. Reports have suggested that the rules and regulations became so tough that many of them have actually exited the industry altogether.
The government finally acted on numerous complaints made by consumers who have been affected by payday loans. Critics of the alternative financial product argue that payday loan lenders operate in a sort of Wild West, which means they do not have regulations in which to abide by. This, opponents aver, enables stores to charge exorbitant interest rates and excessive charges that are hard to bear.