The Analysis Editor’s Letter
Be very careful what you wish for this Christmas
Stephen Kiely Editor, CCRMagazine
stephen@ccrmagazine.co.uk
These are hard times for the pawnbroking industry, but those who are gleeful over its demise should probably be cautious of what they wish for. After all, pawnbrokers serve an important
sector of society, providing loans within given rules and business norms, and without them, some of the most vulnerable members of society may find themselves to be totally excluded from the legal credit they need, and left to the clutches of illegal operators. So it was that, last month, the national press
reported that John Nichols, chief executive of H&T Group, had spoken out to claim that Financial Conduct Authority (FCA) regulation could push people to illegal loan sharks in order to pay for Christmas. The comments came after the FCA began
an investigation, prompting the company to stop offering short-term cash loans while the review was carried out. Mr Nichols said he hoped these cash loans,
that are separate to pawnbroking and which generally amount to about £500, would be available again from January. He said that the timing was a concern for
the business, with pre-Christmas a busy time for giving short-term loans, and had come “a bit out of the blue” from the regulator. “The unintended consequence is that people could go to unregulated lenders,” he added. The company told the media that it
It is clearly essential that lending is always done in the right way and that any problems should be dealt with immediately, but in the most difficult of circumstances, we should understand where lenders are doing the best they can to help customers who would otherwise have very few good options
was working with the FCA to review its affordability checks for loans over the last six years, which Mr Nichols suggested had previously been given a clean bill of health. The review would relate to cash loans, sold from H&T stores, which typically required repayment within six to 12 months. Over
December 2019
the past six years the company said total customer interest payments were £24m. The review will consider whether any compensation should be paid. The firm said in a statement: “Should any
redress be payable, H&T anticipates being able to fund this from its existing financial resources.” Although the company said this area of its
business only accounted for 4% of revenues, its shares fell by 25% in early trading before recovering later in the morning. The news comes just a month after the
FCA announced that Speedloan Finance Limited t/a Albemarle & Bond/Herbert Brown has ceased trading, although it did not enter administration. The firm confirmed previously that it had
closed its stores and transferred all existing accounts to its Pawnbroking Centre. The FCA was subsequently informed
that, as of 30 September, the firm has sold its pawn agreements to H&T Group. The FCA said in a statement: “We are,
and will remain, in frequent contact with both Speedloan Finance Limited and H&T about this matter, including about how they are ensuring customers can get their pledges back in good time upon repayment of the loan.” Ultimately, it is clearly essential that
lending is always done in the right way and that any problems should be dealt with immediately, but, in the most difficult of
circumstances, we should understand where lenders are doing the best they can to help customers who would otherwise have very few good options. Merry Christmas and enjoy the magazine!
www.CCRMagazine.com 3
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