A total of £2.1m has been set aside by H&T Pawnbrokers – the largest pawnbroker in the UK – for a redress programme which will start this month.

It comes after a review of its high-cost short term credit (HCST) business by the Financial Conduct Authority found some customers were unable to afford their loans.

Around 9,800 HCST loans to 8,000 customers were made between April 2014 and October 2019, which the FCA said shouldn’t have been granted.

This represents 11.5% of HCST loans and 12.6 % of HCST customers during the period, H&T Pawnbrokers confirmed.

It said £1.6m will be paid directly to customers (all eligible customers have been identified) and £500,000 will be in the form of an adjustment to the balance of current outstanding loans.

On average, eligible customers will receive redress amounting to £264. Statutory interest up to 31 March 2022 will also be applied and it expects the scheme to be completed within 12 months.

H&T Pawnbrokers said its own costs in implementing the redress programme will stand at around £600,000.

Chris Gillespie, chief executive of H&T said: “The Board of H&T is very aware of the concerns and uncertainly that this review has caused for all stakeholders. We are pleased that the review is now concluded and that the majority of HCST loans granted by H&T are considered to have been lent responsibly.

“Customers whose loan should not have been granted and who are due redress, will be contacted directly and we will endeavour to complete the redress programme as quickly as we can, so as not to prolong the uncertainty further.

“H&T is committed to providing services which maintain the highest standards of customer care and regulatory compliance, and we have co-operated fully and constructively with the FCA throughout this review. High-cost short term unsecured lending no longer forms part of the Group’s product offering.”

H&T Pawnbrokers no longer offers HCST loans.