Over 400 members of staff at the Money Shop are being faced with the prospect of losing their jobs. The Nottingham based company has started a mass redundancy of 427 staff around the UK.
Instant Cash Loans limited (ICL), who are the major pawn broking and cash loans company have released plans to sell of all of the UK stores. They have sent a letter to all its employees.
In the letter ICL stated: “The proposal to make collective redundancies is considered appropriate due to the poor financial performance of Instant Cash Loans Ltd (ICL).”
They further went on to say: “This is a result of the unprecedented number of customer complaints received by the business from claims management companies which relate to previous behaviours and conduct of the business towards its customers, pre FCA.”
ICL have also added that they are no longer able to trade and are going to look into the possible sale of all their stores and pledge books. Complaints surrounding payday lenders rose by around 130% last year, with behaviour being deemed “unacceptable”.
In 2014, The Money Shop faced scrutiny when the FCA clamped down on payday lenders. They were also forced to pay out £15 million compensation in 2015 after it was said customers suffered due to the lack of checks surrounding affordability and debt collection.
ICL have come out and stated that in order to shut down the 27-year old business, they will propose a timetable which will be done in stages. According to the Money Shop website, some stores have already shut down and only around 97 remain open.
As well as this, in early 2019, Jewellery retailer and rival to The Money Shop, Ramsdens, bought 18 stores from ICL for £1.5 million.
It is expected that the collapse of The Money Shop, will add to the ever-increasing number of empty shops on high streets in the UK. This comes after many restaurants, bookmakers and retailers have withdrawn their stores due to challenging conditions in the country.