Axe looming for 200 Money Shop stores

Around 350 redundancies are expected at The Money Shop and the company, a subsidiary of US firm Dollar Financial, has begun consultation over the process which would also see its online and retail businesses consolidated.

The Money Shop, which has more than 500 shops across the UK, may also close one of its three UK head offices, with its Bromley operation most likely to be shut.

The company has grown rapidly since first opening 168 stores in 2006 and currently has about 3,000 staff.

It has two sites in Wolverhampton and others at Bilston, Bloxwich, Cannock, Dudley, Halesowen, Kidderminster, Merry Hill, Stafford, Stourbridge, Walsall, Wednesbury and West Bromwich.

"Regrettably, it is possible that some 350 redundancies may be necessary as the company evolves its business to serve customers in a fair and sustainable way following the introduction of the new regulations on consumer lending, as well as removing duplication of facilities inherited through previous acquisitions.

"We fully acknowledge the impact these proposals may have on our people both personally and professionally and we will support affected employees through this process and into future employment," a statement from The Money Shop said.

The tighter regulation has hit profits across the payday lending sector.

The Financial Conduct Authority this month introduced a cap on the costs of loans made by payday lenders. Rates are now capped at 0.8 per cent per day of the amount borrowed.

The payday loans industry, which has seen a storm of criticism in recent years, has undergone a string of shake-ups after coming under the regulation of the FCA last April.

Fears were raised by the FCA's predecessor body, the Office of Fair Trading, that some payday firms appeared to base their business models around people who could not afford to pay back their loans on time, meaning the cost of the debt ballooned as they were forced to roll it over and extra fees and charges were piled on.

The new rules mean that people using payday lenders and other short-term credit providers will see the cost of their borrowing fall and those who cannot afford to repay their debt on time will never pay back more in charges than the sum they initially wanted to borrow.

Wonga, Britain's biggest payday lender with more than one million active customers, started capping the cost of its loans in mid-December in order to comply with the rules.

Dudley North MP Ian Austin has called for a levy to be slapped on the profits of payday lenders and the money used to fund not-for-profit credit unions. He also wants to payday lendersforced off high streets altogether.