Non-Standard Finance group (NSF) proposed a Scheme of Arrangement in March 2023. This Scheme was approved in June 23.
NSF had three brands: Everyday Loans (lending from high street shops) and George Banco and Trust Two (two guarantor lenders). All customers with loans that started before 31 March 2021 had to make a claim to the Scheme before 31 December 2023.
That date has now passed and no further claims can be made to the Scheme.
If you had an Everyday Loan that started after 31 March 2021, you can still make a complaint about this, but not through the Scheme – so if it is upheld you will get a larger payout.
At the end of July 2024, NSF announced that people with an upheld claim will be paid 25.73p in the £. Payments started in August 2024.
Contents
What is “a Scheme of Arrangement”?
What is the purpose of a Scheme?
A Scheme is a formal legal arrangement that allows a firm to change the rights of some or all of its creditors.
Customers who have been given an unaffordable loan (see below for a definition of this) have the right to make a complaint and take it to the Ombudsman if the lender rejects it. People will normally get a refund of interest if they win their case.
A Scheme changes these rights:
- any affordability complaints have to be made within a 6 month window – no one can make a claim after that even if they did not know about the Scheme;
- the decision to uphold or reject the complaint is then made within the Scheme and there is no right of appeal to the Financial Ombudsman;
- people owed a refund in cash will only be paid a percentage of it as there is a limited amount of money that all refunds have to be paid from.
So the lender gains as they will pay less to settle these complaints and at the end of the Scheme there can’t be any more complaints.
Other similar Schemes
NSF is now the 5th bad credit lender to seek the protection of a Scheme that will limit the refunds it has to pay to its customers for unaffordable lending:
- schemes by ICL (payday loans eg the Money Shop) and Provident (doorstep lending) have completed. Each paid out about 5% to customers who had their claims upheld
- an Amigo (guarantor loans) Scheme is underway but Amigo failed to raised the necesary capital to continue in business. so it will be liquidated when the Scheme ends.
- Morses Club had a Scheme approved but it then went into administration and their scheme failed.
What is unaffordable lending?
A lender has to check that a loan is affordable for customers before giving the loan.
For Everyday Loans, this is a check on the affordability for the borrower (or borrowers where the loan is a joint loan);
With guarantor loans from George Banco and Trust Two, the loan has to be affordable for both the borrower and the guarantor. A guarantor has to be able to make the repayments out of spare income – simply owning a house does not mean that a loan is affordable.
The Financial Ombudsman (FOS) has set out what it looks at in an affordability complaint.
A simple summary is that when the loan was given it has to have been likely that you could repay it on time, without having to borrow more or get behind with bills. So if all the loan payments were made on time, the loan may still have been unaffordable if repaying it meant that your credit card balance or overdraft increased.
Recent Everyday Loans are NOT included in the Scheme
The Scheme covers customers who borrowed or guaranteed a loan from Everyday Loans, George Banco or Trust Two before 31 March 2021.
It does NOT cover Everyday Loans made after March 2021. If you have one of these later loans this Scheme is not relevant.
Instead you can make an affordability complaint in the usual way. See Affordability complaints about large loans for a template to use,
If your complaint is rejected, send it to the Financial Ombudsman (FOS) straight away, as that article explains. FOS will be able to look at these complaints as they are about loans that are not included in the Scheme.
The Scheme timetable
- 28 April 2023 – Court Convening hearing – approved the voting arrangements
- May & early June 2023 – voting on the Scheme.
- 22 June 2023 – Court Sanction hearing – approved the Scheme
- July to end December 2023 – customers have 6 months to submit a claim to the Scheme. Claims after this point will not be considered in the Scheme and will not be able to go to FOS.
- by end December 2023 – NSF raises enough money to continue and pays £14m into the Scheme to be distributed. If this is not successful the company is likely to go into administration.
- April 2024 – refunds paid from the Scheme.
Raising the £14m for the Scheme
NSF originally proposed two ways to raise new capital – Plan A and Plan B. Since March it has abandoned Plan A and now proposes:
a transfer of the Group’s business to the secured lenders in exchange for the release of a portion of their secured debt and the provision of a new lending facility. Part of the proceeds from this new lending facility would be used to fund the Scheme Fund and cover the costs of the Scheme.
This has not changed the amount of money that is likely to be available to distribute in the proposed Scheme.
Make a claim to the Scheme
It is now too late to make a claim to the Scheme.
What happens after you have made a Claim
NSF will decide whether to uphold your Claim.
I think it’s worth checking your Portal Account every month to see if there is an update there.
If your claim is rejected you can appeal this, but there will be a time limit. So don’t forget to keep looking for this.
What refund may you get?
If an affordability complaint is upheld in the Scheme, the compensation (called “redress”) is calculated:
- for upheld loans that have been repaid, the redress is the interest paid;
- for outstanding upheld loans, interest is removed so the borrower only has to repay in total the amount they borrowed. This may mean a lower balance is owed or that the loan cleared and a cash refund is due.
Where your balance is being reduced or cleared, this will be paid “in full”.
But where a cash refund is calculated, you will not receive that amount. The amount you will get will depend on the total cash refunds calculated and the amount of money in the Scheme to be distributed.
NSF says customers may get paid 24-31% of the calculated cash refund
This is a very uncertain estimate. It depends on how many people make a claim to the Scheme.
It also depends on how many of the claims are upheld and how many of the loans in each claim are upheld.
Credit records
NSF is likely to remove loans that it decides are unaffordable from your credit record.
Card & catalogue affordability complaints
Can you get an overdraft refund?
Refunds from large loans
Kay says
My funds are in :)
Happy spending everyone!
Ross says
Question: can I recieve a physical letter confirming my total and payment confirmation or is it all done via email and through the portal?
Alberto says
Got paid today. Thank you to everyone who has been posting here regularly.
Special thanks to Sara for having been so helpful all this time.
ann hayes says
mine come in yesterday – again a great thank you to Sara – you have helped me so much i am totally debt free now for the first time in 20 years – you really deserve a medal
Karen says
My complaint was upheld.
I borrowed £3500 and what I have paid has left a balance of just over £750 which is still being laid by DMP. Although they have wiped out paying any interest on loan, will I get anything else?
Sara (Debt Camel) says
no, that isn’t likely. How large are the other debts in your DMP? Have you looked at making affordability complaints about them too? See https://debtcamel.co.uk/tag/refunds/ which has templates to use for different types of debt
Karen says
Thanks Sara I’ll look into
Petey G says
Mine came in yesterday gotta say thank you to sara for coming across this page otherwise id say I wouldn’t have known or had the information to start a claim
Leanne says
Feel like I’m the only person still waiting for their payout 😭
Glad everyone else has had theirs which shows the end is in sight
madeline donnelly says
Me too Leanne, happy i am not the only one left
Leanne says
Give them a call to see if your name is on the spreadsheet for payments they are having trouble processing.
My name was on it as they had them as just Miss them my surname instead of Miss Leanne “Surname” so they’re retrying it end of day today
Stuart cooke says
Hi I got paid out today. Has anybody else
Leanne says
Loads of people, read the comments
Leanne says
Just called the support line to see if there was any issues with my payout as my guarantor received their payment but I still hadn’t
Agent advised me that they were a problem sending to my account as it bounced back even though the details were correct, only thing they didn’t have was the sull name on the account so updated with them.
They advised that they have a spreadsheet for accounts they had issues sending to so would advise if you still haven’t received your payout to give them a call and check the details
Madeline Donnelly says
Thats great you should get it shortly then. I got mine today. Thank you all for the info and updates over the year, thank you Sara.
Daryll says
Has anyone been Paid today, just spoke to someone from customer service as my surname in my bank details section was spelt incorrectly. After being Corrected i was told a payment would be made today without me even getting to ask when I’ll receive payment?.
Leanne says
I called Thursday and was told that my payment bounced back even though the details were correct .
They had just miss “surname” for the name on my account so updated to include my first name but I’m still waiting for the payment.
I was told that they were making the payment again Thurs but still not received so will be calling them tomorrow
Zena says
I’ve still not heard a thing or received any payout, should I call them and if so what is their phone number , just don’t know what to do any advice would be much appreciated.
Sara (Debt Camel) says
You have made a claim to the scheme? Have you not had any decision?
Zena says
I applied to the scheme as soon as I received an email about the scheme, that was ages ago and I’ve never received any decision regarding this.
Leanne says
Have you tried logging into the portal to see what the decision was?
I think all appeals had to be done by the end of December 2023 so unfortunately if your claim was rejected originally then it’s too late to appeal now
Sara (Debt Camel) says
You need to contact them urgently – it is possible that you claim was rejected and it is not too late to appeal this.
Email contact@nsfclaims.co.uk and also call 0330 045 0685
zena says
Thank you, I’ve just emailed them and will let you know how things go
Claire says
Hello
Please can I check when completing the R40 form, do I select the current tax year 24/25 as I received the payment this August?
Sara (Debt Camel) says
Yes that’s right
David says
Firstly thank you Sara for the information that you provided via this site that has made life financially better for so many people. the help that you’ve provided and awareness of the possible has been invaluable. With regards to the withholding tax that has been deducted from settlements,I’ve asked for a certificate from the scheme to prove the amount deducting in withholding tax to HMRC but they( NSF/ Everyday Loans)are refusing to provide one , instead insisting that I should contact HMRC. Despite numerous attempts at explaining that it is they that have to provide the certificate as proof of deductions made, they are either simply refusing,as it’s extra work for them or are ignorant of these reason why they need to provide. Anyone have any advice as to how to successfully evidence the withholding tax deducted from my claim?
Sara (Debt Camel) says
Do you have an email says what tax was deducted as a part of working our what they paid you?
David says
Hi Sara
Yes, I have an email from them confirming the redress payment and that it is net of withholding tax of a stated value.
Is that sufficient evidence for HMRC? My understanding was they required a R185 Certificate of tax deducted to support any claim.
Sara (Debt Camel) says
They are being unreasonable in not supplying a certificate, but I hope you should be ok with that email