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.
People who made a claim to the Scheme are now waiting for decisions and eventually any payout.
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.
Should you carry on paying NSF for a current loan?
You are still legally liable for the loan – the NSF Scheme does not change this.
Ring-fencing new payments
NSF wants to encourage customers with a current loan to continue making payments while their claim is being decided in the Scheme.
So these payments will be “ring-fenced” when the customers has made a claim. Then they can be refunded in full if the claim is upheld rather than just a percentage being refunded.
However it may be 6-8 months before your claim is decided in the Scheme. That is a long while to have to carry on making payments to a loan which may eventually be decided to be unaffordable…
If paying is causing you problems
If you are currently struggling to pay NSF, perhaps being behind with priority bills or having to borrow more on credit cards or catalogues, then carrying on paying them for a loan that may be decided to be unaffordable is not a good idea.
In general, it is probably better for most people having difficulty paying one of these loans to stop paying or offer a low affordable payment. This will harm your credit record but if you later win the claim, that negative mark will be removed from your credit record.
If you are the borrower for a guarantor loan, NSF is legally entitled to ask the guarantor to pay if you do not, but they will not be able to take any legal action against the guarantor until your claim has been decided in the Scheme.
If you default on other debts or don’t pay important bills or borrow elsewhere in order to pay NSF, you may end up in a much worse position even if your NSF claim is eventually upheld.
To get specific advice on your case, I suggest you talk to National Debtline on 0808 808 4000, or visit your local Citizens Advice if you have problems with priority debts and bills.
Dan says
So there’s your answer from email, They ain’t plaanning on getting them out any time soon
Hi, Thank you for your message. We are still on track to make payments in August 2024, so please look out for our next communication at the end of this month which will advise the percentage figure all will be paid on. Once the communication has been received, from the NSF Group which is due to be sent the last week of this month (July 24) the payments will start being made, so I would say early August 24. Kind regards Su
Doubting Thomas says
What do you mean “not getting them out any time soon”?
It’s the end of July next week – so % will be confirmed.
Then it’s I think within 15 days they have to payout by.
So this is actually quick.
I’ve sat with people from Grant Thornton today and they confirmed that they had system outages due to the crowdstrike issue on Friday.
So that’s why the report hasn’t been made public yet.
Priorities are getting back up and running.
Sara (Debt Camel) says
the comments at the moment are getting increasingly bad tempered and repetitive. Trying to convince other people commenting that they are wrong is not going to get you any news faster or and payment earlier.
I suggest waiting for a few more days to see if the report is published.
KH says
See below which I am sure others may be interested in. I received this directly from the Scheme Supervisor after emailing her this afternoon. The delay is not connected to the Crowdstrike incident.
We are currently waiting on some information from the company before issuing the next Scheme Supervisors report. As the issuance of this report that would trigger the requirement for the company to make distributions available to scheme creditors, you will appreciate the company is looking to ensure all information required is provided. We would hope the issue the report later this week.
Sara (Debt Camel) says
No one should make any plans based on receiving their refund at any particular time.
Sara (Debt Camel) says
This is just a general comment. I’m not saying you won’t get paid. But these things can take a lot longer than you would believe. I have seen a lot of them. No point I’m getting worked up about it, it won’t achieve anything apart from stress for you.
Rylan says
This comment coming out of the blue sounds like you know something we do not
Sara (Debt Camel) says
I don’t
Leanne says
I made that mistake when the payment was originally due April 😔 was planning on using it for spending money for my holiday but when no payment came I had to make alternative arrangements
Kel says
Totally agree , and any money back eventually is a bonus !
Sean Cousins says
I was in a debt Management plan two months in, as my job fell through as a teacher. They said I’d be eligible for this and then rejected it anyway. The adjudicator still rejected it without any reason why, can I do anything?
Sara (Debt Camel) says
was this loan affordable at the time it was given? and only stopped being affordable when you lost your job?
Ben Maguire says
Notification on the portal to say adjudication all complete and everyone should have had a letter but I’ve not had anything through, does anyone know the %age?
Important Notice: 25 July 2024
We would like to express our sincere gratitude for your patience and understanding throughout the process of us reviewing your claim.
We have now completed adjudication of all claims and all claimants should have received a final outcome letter regarding their claim. You can view the outcome of your claim and ascertained claim value through the claims portal available at http://portal.nsfclaims.co.uk. If you are unable to access the claims portal, you can also call 0330 045 0685 (local rates apply), lines are open between 9am and 5pm Monday to Friday.
The Scheme Supervisor’s report will be released shortly, we have delayed the release by a few days so that the report can include the final Scheme Payment Percentage. Any outstanding scheme payments will be made shortly after the report is released and we expect all payments to be complete by the end of August.
Leanne says
The letter will be the 1 you received letting you know if your claim was upheld or not.
The percentage won’t be released until the report is published
Al says
You should have had an outcome now informing you if your claim has been successful.
When you log into the portal it will allow you check the status of your claim – check this and too see if there is a change in the status or you should have received an email. Did you have an initial outcome and then challenge it?
Rebecca says
Great news, it’s happening every one. Let’s just hope the percentage is the higher end.
Kellie says
Good news that there is finally an update. I called just before 5pm. I was told that emails will be going out before Wednesday advising on percentage and sum that will be received, followed by payment during August.
Missie says
Payment now end of August
Gemma says
Don’t count on it being August at all. In April we were still being told it was going to be paid right up to an out of the blue announcement that it would be August.
PDN says
Did they say the letter will go out via email or post? Is it available via the portal as I cannot see anything
Charl says
I’ve never had a letter sent to my home address. All communications have been via email and the portal.
Marc says
The letter they’re referring to is the one that told you your claim has been upheld, you probably had it via post or email months ago.
Mr Craig Anderson-Jones says
I have not received an email, letter or anything. The status has been the same since June, which is ‘claim upheld.’ I’m not making any plans on getting anything, tbh. If I do – great – if not, then it is what it is.
Kel says
Mine still says upheld ??
Marc says
That’s a good thing isn’t it? Where you expecting it to chance for some reason?
Ross says
My claim was upheld in February but I’ve hears nothing since, is the letter a physical one being sent to my home address or email?
Marc says
Have you not had your letter already? How do you know your claim was upheld?
KH says
Everything so far has been by email as far as I know. I couldn’t locate the original email so rang them this morning and they forwarded it to me. You could try that.
Richard Bagshaw says
Wasn’t there something in the court agreement that stated they had to pay within a certain time of the adjudication finishing? 14 days or something as far as I remember.
Late August doesn’t meet that obligation.
Leanne says
5.3 Promptly, and in any event within 15 Business Days, following the determination of the Scheme Payment Percentage in accordance with Clause 5.2, ELL shall make Scheme Payments to Scheme Creditors. A Scheme Creditor’s Scheme Payment shall be equal to the amount of its Net Ascertained Scheme Claim multiplied by the Scheme Payment Percentage
So they have to make payment within 15 business days of providing the percentage.
I thought someone had said on the post earlier that they have 10 business days after all adjudications had been completed to provide the percentage but looks like it will be longer than that if people are saying the percentage won’t be released until Wednesday
Simon says
My letter can be found under the ‘Messages’ tab
Doubting Thomas says
Right hopefully this will clear things up:
1) the letter they refer to on the website is the Claim Upheld EMAIL you would have received.
If you haven’t received an email, log into the Portal and check if your claim is upheld – if so contact NSF on the details at the bottom of their website.
2) The Report will be released in a few days time which will mention the Dividend % of claim value you will receive.
3) Once this report is published you will get a notification of how much funds you will be recieving WITHIN 15 WORKING days of the announcement being posted.
4) Depending on your bank you will receive the funds within 5 WORKING days of the receipt of funds value being confirmed.
5) Not sure of anything RING the number on the website – they are very helpful and NO they are nit fobbing you off if they can not confirm or answer a question they have no knowledge of.
Kellie says
The letter people will have had previously confirmed two things- claim successful and the claim value (subject to a percentage) or claim rejected.
The email we should receive by Wednesday will give the precise sum to be received and the related percentage.
Hope that clarifies.
Kellie