QuickQuid has told some customers that it plans to delete loan data over seven years old with effect from today, 15th April 2019. It says this is to comply with its legal obligations.
QuickQuid has sent emails to the affected customers asking if they would like a copy of their data before it is deleted.
It seems to me that this new policy is not in the customers’ interest because it will make it harder for some customers to get a refund for unaffordable lending.
I think the Financial Conduct Authority should be concerned about it.
What QuickQuid has said
This is the email that has been sent out:
Dear [customer’s first name],
We are providing you with the opportunity to contact us to obtain any of your personal data before it is anonymised or deleted.
If you would like to obtain your data, please submit your request before the 15 April 2019 by logging in to your account and navigating to the “Data Requests” page from your account menu. If you need assistance requesting your data, please contact us at GDPR@QuickQuid.co.uk or 0800 056 1515.
GDPR and old data
Data Minimisation is one of the GDPR principles. The Information Commissioner’s Office tells firms:
You should periodically review your processing to check that the personal data you hold is still relevant and adequate for your purposes, and delete anything you no longer need.
It sounds as though this is the “legal obligation” QuickQuid mentions in its email.
But the ICO doesn’t say that all data over a certain age has to be deleted. If the data is needed, it can be retained.
And there are good reasons why QuickQuid still needs this data. Tens of thousands of customers may want to complain that QuickQuid gave them unaffordable payday loans.
Background – refunds for loans more than six years old
The background to this data deletion is that QuickQuid is facing having to pay large refunds to many customers with older loans following FOS’s decision that they should be refunded.
There has been a long battle over this, which QuickQuid has now lost.
Financial Ombudsman (FOS) rules say it can only consider complaints brought within six years, unless the customer has only become aware in the last three years that they can complain.
Most payday lenders interpreted this to mean that no refunds need be given on payday loans more than six years old.
In 2016 FOS said it could look at older loans where customers had only recently found out what an affordability complaint was. QuickQuid and Wonga objected strongly and there followed a prolonged exchange of letters between the lenders’ lawyers and FOS. Thousands of affected FOS complaints were placed on hold.
In 2018, FOS issued definitive guidance in the technical section of its website saying it could look at older loans, see Ombudsman will look at payday loans over 6 years old for details.
Most other lenders have accepted this. The Administrators for both Wonga and Wageday Advance – who would normally have applied the Statute of Limitations to reject claims more than six years old – have also accepted that customers with older payday loans have a right to compensation.
But it is only in the last few weeks that QuickQuid has started to accept it does have to refund loans that are over six years old. As a result, there is still a long backlog of QuickQuid cases at FOS.
Without the older loans information, how can QuickQuid handle complaints properly?
If QuickQuid deletes older loans, it will no longer be able to respond fully to a customer whose complaint includes some older loans. This will force all the customers to go to FOS for a decision, slowing the complaint process down.
The FCA’s complaint rules say:
DISP 1.3.1 Effective and transparent procedures for the reasonable and prompt handling of complaints must be established, implemented and maintained
DISP 1.3.2 These procedures should, taking into account the nature, scale and complexity of the respondent’s business, ensure that lessons learned as a result of determinations by the Ombudsman are effectively applied in future complaint handling.
- ascertain the scope and severity of the consumer detriment that might have arisen; and
- consider whether it is fair and reasonable for the firm to undertake proactively a redress or remediation exercise, which may include contacting customers who have not complained.
It seems to me that after deleting older loan data, QuickQuid will be unable to comply with these rules.
Many customers don’t have details of their loans
Most payday loan customers rely on the lender to provide a list of their loans – when and what they borrowed and repaid. Some people can reconstruct this information from their bank statements.
But many people who got into a big mess with payday loans were forced to close their bank accounts to prevent payday lenders taking most of their wages every time they got paid.
It is usually possible to get bank statements from closed accounts but this becomes harder going back further than seven years. For thousands of customers, this may be impossible.
With no evidence about the older loans, what can FOS do with a complaint?
If evidence in a court case is destroyed, deliberately or negligently, the common law principle is to assume that the missing evidence would have benefited the other party (“omnia praesumuntur contra spoliatorem”). But it is hard to see what FOS can do if QuickQuid has deleted all the loan data and the customer can’t get bank statements.
QuickQuid has offered customers copies of their data
If a customer has asked for a copy of their personal information before it is deleted, making a complaint afterwards will not be a problem.
But I don’t think offering this information is sufficient for two reasons:
- some customers have not heard of affordability complaints. They may have thought that getting rid of the old data was a good thing!
- others may not have received the email from QuickQuid. It could have gone to an old email address or gone into a spam folder.
This action by QuickQuid may harm some customers
Current complaints at FOS should be fine if QuickQuid has already sent a list of loans to the customer or sent its case file to FOS.
But I think QuickQuid should take account of the future information needs of its other customers who have not yet complained. Destroying data will make future complaints much harder.