UPDATE A few people have not been paid by the end of June.
And everyone will receive a second, much smaller payment in December 2021.
See Money Shop Scheme to pay 2nd small refund for details.
A “Scheme of Arrangement” is in place for borrowers from the Money Shop, Payday UK or Payday Express who were given unaffordable loans.
Contents
Background to the Scheme
Failure to assess affordability over many years
ICL had two million customers, with three big payday lending brands:
- The Money Shop was once Britain’s largest payday lender on the high street. The Money Shop stopped making payday loans in August last year.
- Payday UK and Payday Express were two large online lenders. These both stopped making new loans in October 2017.
In summer 2018, the number of affordability complaints about payday loans increased significantly. Paying refunds on these complaints forced Wonga and Wageday Advance to go under.
In the last half of 2018, ICL received 45,000 complaints. So ICL has been facing escalating costs in the last year and it has been closing shops. Now the business is being closed completely because of the cost of these complaints.
A Scheme of Arrangement is a legal device which limits a company’s liability to its creditors. See What is a Scheme? for more details. ICL is using this to limit the amount it has to pay out in refunds on unaffordable lending.
The Scheme was approved by creditors in September and by the Court on 8 October 2019.
Paying 4.3% in May & June 2021
A claims portal was put live and all Claims had to be in by April 9 2020.
The Money Shop home page says:
- We have calculated the final dividend amount and you will be receiving 4.31p per £1.
- Where you provided us your bank details we will commence making payments from 24 May 2021.
These payments will be made by BACS. People will be paid in batches, once or twice each week through to the end of June:
- We are unable to let you know the exact date of your payment.
- You will receive an email before we make your payment with your calculation and cash payment amount.
- If you did not provide us with bank account details, we have sent you a cheque.
The following details come from the March 2021 Scheme report:
- 182,566 Claims were received;
- the uphold rate was about 85%;
- the total compensation people should have got was c. £340 million – now people will only get a tiny amount of that back;
- it is now too late to submit a Claim.
No tax will be deducted from the amount you will be paid.
Was your ICL debt sold to PRAC/BW Legal?
Where you still owe ICL a balance on the last loan, this has been “set off” against your refund.
An example:
- you should have had a refund of £2500 and you stilled owed £1000
- then your balance is cleared, leaving you now being owed a refund of £1500
- you then get 4.3% of the £1500
If your last loan was sold to a debt collector, in most cases ICL has arranged for you to still have this set off.
The exception is if your loan was sold to PRAC/BW Legal. Here you have been left owing the debt to PRAC/BW Legal and were only paid 4.3% on the redress ICL calculated.
PRAC/BW Legal is offering to reduce some customers’ balances, but see No set off in a Scheme/Administration when debt had been sold? for how you can complain and ask them to write off your whole balance.
A very poor outcome for customers
When the Scheme was proposed in August 2019, it was suggested people might get back nearly 80p in the pound.
My first thought when I saw the 80p in the £ estimate was “and pigs might fly“… see Will the Money Shop really pay 80% of your payday loan refund?
And that has turned out to be spot on…
In September it admitted that:
- it has decided to include all loans over 6 years which may reduce this to c. 44p.
- it has decided to simplify the assessment in favour of the customers, which may further reduce this to 27p.
- if twice as many people apply for a refund, this may go down to 14p.
By February 2020 in the previous quarterly report, the scheme administrators were warning this could be less than 10p.
So 4.3p is a dismal outcome for customers.
Why won’t the FSCS help these customers?
The Financial Services Compensation Scheme (FSCS) covered people making PPI claims if their firm had gone bust.
But the FSCS doesn’t cover payday loans. This was a very poor decision by the FCA.
Customers of the Money Shop, Payday UK and Payday Express have been let down badly by the UK regulators. The lenders were allowed to carry on giving loans that breached the affordability rules for years. And now there is no backup compensation scheme for when a lender goes under.
Updated July 2021
Voting now open on Provident Scheme
Amigo’s proposed Scheme
Refunds from large bad credit loans
Yasmin Maria Loveridge says
Hi Sara,
I paid my loan off in 2016 to myjar and I’ve put in a unaffordable lending complaint and they’re saying I still owe money when I don’t.
Any advice please?
Thank you
Sara (Debt Camel) says
Tell them you don’t! Ask to see a statement of your account.
PS please put comments about Myjar on the payday loan page – they are more likely to be seen there by people who have recently dealt with Myjar.
Miss Emma Jones says
Anyone else received emails this week from Moneyshop? Sent them my bank details and they confirmed that I due a payment back but not received anything yet, that was 2 weeks ago, know they said end of June..
Mark says
What email did you get them on? I still havent recieved an email or payment.
Emma Jones says
scheme@themoneyshop.co.uk
Elizabeth Barnard says
I’ve received nothing and it’s July now.
Sara (Debt Camel) says
anyone who has not been paid should get in touch with ICL
Emma says
I rang Wednesday and was told they were making 2 payment this week by BACS, Monday and Wednesday and could take up to 5 days to clear, the lady picked up straight away and was very helpful. Just hoping it clears soon!
Sara (Debt Camel) says
good to hear the phones are being answered quickly.
Mark says
Emma has your cleared yet?
AM says
Still not received money. Received email on 11th June, then a further email 10 days later to say my bank details were wrong. Then was told had to wait 14 days before they processed payment again. Still not received anything. Anyone else had same issue
Natalie says
Still waiting for my payment. Had to chase them a few days ago and still no reply. Getting fed up now!
J says
I have been waiting since 3rd June send them loads of emails and no response would be nice if someone could actually comment who we can put complaint into.
Ceri Ann says
Sara if possible could you continue to advise J and the others who are still waiting. Let’s not forget them as they surely need to know were to get answers
Sara (Debt Camel) says
yes, I am trying to clarify what will be happening.
Sara (Debt Camel) says
See new article https://debtcamel.co.uk/money-shop-scheme-second-small-refund/ which looks at
– the smal number of custom,ers who haven’t been paid
– the second very small payment everyone will be getting in December.
Adam Bateman says
Got my email saying I’m getting a whole £38.57 redress. This email was on 21 May 21 and said I’d be getting it within 28 days. It’s now 1 a July and nothing.
Sara (Debt Camel) says
read https://debtcamel.co.uk/money-shop-scheme-second-small-refund/
Tyler N says
Is there anyway we can lobby a petition to get the FSCS scheme looked at?
When I contacted the FCA with my complaint after a year they responded and told me its “up to the government to include payday loans in the FSCS, Not the FCA”
And the rest of my complaint was about the FCA’s conduct with payday loan companies going under the last few years and only paying tiny % of expected a refunds, knowingly for a good few years!.. (just about every PDL company goes bust and pays pennies back )
FCA said a response to that part is on hold due to “active investigations which if they responded now could jeopardize the ongoing cases”
I can’t find any petition similar so is it worth a shout?
Sara (Debt Camel) says
I am not a fan of petitions. Unless you can get them signed by hundreds of thousands of people, they are ignored. It would be much better if people wrote to their MP directly about this – get your MP’s email here https://www.writetothem.com/ – and copy this to the Chair of the Treasury Select Committee Mel Stride, mel.stride.mp@parliament.uk
The FCA should not have dismissed a complaint saying it is up to the government to include payday loans in the FSCS.
This decision to extend the FSCS to cover consumer lending was taken by the FCA in 2016, see https://www.fca.org.uk/publication/consultation/cp16-42.pdf which said in 9.2 that “9.2 Consumer credit activities were brought within FCA regulation in April 2014. We did not extend FSCS cover to any of the new activities at that time, but said we would look at this issue when firms were fully authorised. Having now considered the issue in more detail, we still believe that most consumer credit activities should remain outside FSCS protection because our other regulatory requirements are sufficient.”
In 2019, the Treasury Select Committee asked Andrew Bailey, the FCA CEO at that time, to explain why the FCA took this decision. His letter in response is here https://www.parliament.uk/globalassets/documents/commons-committees/treasury/Correspondence/2017-19/FCA-Chief-Executive-to-Chair-re-Wonga-150219.pdf. That letter shows that the FCA regards the decision to extend the FSCS to cover lending as a matter for the FCA.
So it is completely reasonable for you to make a complaint to the FCA that this was a very poor decision by the FCA. If the FSCS had been extended to cover lending, then people could get full redress from the FSCS if a lender failed. So it was the FCA’s inaction that has resulted in you losing money.
I suggest you go back to the FCA and explain that. If they still reject your complaint you can send it to the FCA Complaints Commissioner – the response you were sent should have explained how to do that.
(This is what happened when a PPI firm went under – the FSCS paid out in full. The FSCS covered PPI refunds as they were “insurance” which is covered by the FSCS.)
If other people would also like to complain to the FCA, you can do it by email to complaints.scheme@fca.org.uk or by completing a form on their website: https://www.fca.org.uk/about/complain-about-regulators/form
You are asked in the form what firm you are complaining about – this is the lender, but you are complaining about the FCA’s failure to extend the FSCS, not what the lender did wrong. You can list several lenders if you have been affected by them going under.
Brief details of your complaint –
“The FCA’s failure to extend the FSCS’s remit to cover consumer lending has meant that I have lost several hundred/ thousand pounds [if you know the exact number say so] when xxxx went into administration [or entered a Scheme].”
Brief details of the steps you have taken so far to try and resolve the matter (including any compensation received to date):
“My complaint was upheld by the administrators but I only received [£]. So far as I know there is nothing else I can do.”
Misconduct alleged:
“The FCA made a bad decision in 2016 to not extend the FSCS to cover consumer lending, see section 9.2 in CP16-42 https://www.fca.org.uk/publication/consultation/cp16-42.pdf.
Andrew Bailey’s justification of this decision in 2019 in this letter https://www.parliament.uk/globalassets/documents/commons-committees/treasury/Correspondence/2017-19/FCA-Chief-Executive-to-Chair-re-Wonga-150219.pdf was that it would not affect many people and would not be for large amounts of money. But millions of people have been affected. The refund I should have received would have made a significant difference to my life [expand – would you have been able to pay off other debts? pay arrears on important bills?]
The FCA should have known by 2019 that a very large number of people had a good claim for redress from payday lenders. Its failure to extend the FSCS left me and many others without any safety net when a regulated firm went under with very insufficient capitalisation to repay these redress claims.”
Remedy sought
“I would like financial compensation for the money I have lost. And the FCA should extend the FSCS scheme so other people do not have this trouble in future.”
———————————–
If the FCA rejects this complaint, they will explain how you can send it to the Office of the Complaints Commissioner.
Marie says
I’ve just submitted my complaint, fingers crossed!
Tyler N says
I sent my response to the FCA!
The more people do it the more likely something will change or atleast get some attention due to the amount of time it takes the FCA to process such complaints.
And if it could protect us all – Now and in future.
Its something worth trying atleast.
I will also try contacting my MP to see if this results in anything too.
Thanks for a great response as always Sara!
Rebecca says
Are you complaining to them because you only received a % of the redress owed please ?
Tyler N says
In short… Yes.
its regarding the FSCS (compensation scheme) being extended to cover ALL payday loans/high cost credit. If this was in place similar to the FSCS that was available for PPI until last year, then we would be protected from these companies when they go under.
Everyone would get 100% of any compensation through FSCS instead of the pathetic percentages we get after companies call administrators to scrape the pennies up.
Ljc says
I’ve just submitted my complaint to the FCA . I know there is thousands of people on here following the ICL thread & all it takes is 10 mins to do a quick email complaint . Please send in your complaints as surely if they get hundreds, thousands of them they will have to do something .
Ljc says
Hi Sara /Tyler
So I put in a complaint to the FCA re the fscs not covering payday loans & they’ve sent me this response , which I thought was a bit random …any thoughts ?
Thank you for your complaint form of 5 July 2021.
In order for us to understand your complaint in more detail, we’d be grateful if you could let us know when you first became aware of the matter regarding Payday Loans.
This will enable us to fully understand any allegations raised against the FCA and decide whether this is something we can investigate under the Complaints Scheme.
Sara (Debt Camel) says
I don’t know why they are asking that, but they may not need exact details. They may just want to rule out something that happened a long while ago. For example before 2014 the FCA wasn’t the regulator for payday lending.
Did you make a complaint to the Money Shop, Payday UK or Payday express before September 2019 when the Scheme started? Or was the first you heard of it when you has an email from ICL about the Scheme?
D says
finally got my redress paid after it ‘bouncing back” after months of dealing with the thick and rude as hell call handlers . granted they don’t know much but the most unhelpful morons i ever dealt with . i also know my details were correct in the first place….good luck everyone
Faye says
Oh dear, that’s a shame…I only spoke to them a couple of times and must say they were very nice and as helpful as they could be under the circumstances. Errors happen and to say they have paid out around 150000 people or so and fielded probably millions of queries…I personally don’t think “morons “ is fair
M Clarke says
Snap.
Received a email on the 18th stating my details were incorrect and they were holding my settlement till I gave them correct details. These I checked and they were correct. Emailed them 4 times to clarify this and ask when I could expect my settlement. Last week a reply came back that they’d made payment on 8th and it was a matter for myself and my bank. After checking the bank says no payment was made. I think they truly hope you’ll just go away and not bother for such a small amount of redressed.
Craig says
Still no email or redress even though they said my claim was valid and I updated my details online and had same bank details over 20 years anybody else heard nothing or received nothing after saying they would redress?
Sara (Debt Camel) says
You need to email and ask if you were paid by cheque, because it didn’t arrive, or by bank transfer, in which case you want to verify the bank details they have as it hasn’t been received.
Craig says
What’s the email address to contact them?
Sara (Debt Camel) says
scheme@themoneyshop.co.uk
Emma Jones says
Got an update, finally a reply to my emails, hope you all have too.
“We will be attempting payments via BACS, week commencing 12th July”
Phew was getting worried that I was going to have to waiting until December.
John says
Got my money through last week, £259 (original redress amount over £6k /(
Just seen a second payment in december. Great news, only around £26 but still, didn’t expect the first payment and the second is an little present for my boy 😊
Thanks for the update
PH says
What’s the latest with Moneybox247. They originally said they will be paying out in April 2021. ❓❓❓
Marty says
So they have been emailing me throughout and said I would get an email with redress amount nothing landed so I chased it up and got this
The reason you have not received a refund is you were awarded a pre scheme redress.
Pre-Scheme Redress relates to a claim you have received a refund for in the past. This amount has been taken from your total redress offer leaving you with a total potential redress offer of £0.00.
Many thanks
Customer Relations
Sara (Debt Camel) says
did you receive a refund from the Money Shop, Payday UK or Payday Express?
Sops says
I think that’s a load of balony! I complained to them years ago and got money back , then I didn’t know the process of what they should legally have paid and got about £500 back , on the redress scheme I still got just over £300 which on the percentage allowed is correct , they would normally deduct any previous refund from current scheme amount , unless you got back all the interest plus 8% simple before they went belly up I’d question it for sure .
Marty says
2 of 7 loans partially upheld by fos was payday UK and Express
Sara (Debt Camel) says
so what refund did you get? And how did that compare to the redress ICL calculated?
Sar says
Hi Sara,
Have complained via the template you have given. Is there a timeframe for them to deal with these complaints in?
Sara (Debt Camel) says
Complained to who?
Sar says
FCA- I got this response. I don’t see how this is relevant
Thank you for your complaint form of 6 July 2021.
In order for us to understand your complaint in more detail, we’d be grateful if you could let us know when you first became aware of the matter regarding Payday Loans.
This will enable us to fully understand any allegations raised against the FCA and decide whether this is something we can investigate under the Complaints Scheme.
Full details of how we handle complaints can be found on our website – https://www.fca.org.uk/about/complain-about-regulators.
I don’t know what to say as I can’t remember when I started looking into it or when they first contacted me or how it’s relevant.
Sara (Debt Camel) says
I don’t know why they are asking that, but they may not need exact details. They may just want to rule out something that happened a long while ago. For example before 2014 the FCA wasn’t the regulator for payday lending.
Did you make a complaint to the Money Shop, Payday UK or Payday express before September 2019 when the Scheme started? O r was the first you heard of it when you has an email from ICL about the Scheme?
Marie says
I too have received the same email from FCA and I have told them that my initial complaint was raised in around September 2018. I don’t have any other information available.
Ljc says
Hi Sara
I made a complaint to the money shop around May 2018 , sent to Fos 2 months later they sat on it for about a year , then ICL went into administration so I found out about the redress scheme a year or so ago ?
Jay says
Any updates about 247moneybox?
Mark says
Hi Sara, thanks for all you do. I took the advice from this site and sent a template to many creditors regarding unaffordable lending and high interest etc. One of them has come back with a Final Response and advised unable to uphold complaint etc. Stated that they did affordability checks and many of my loan details they no longer hold as over 6 years old. However, the very next sentence offers me approximately £2k in order to settle the complaint in respect of interest! The 2 loans they detailed only totalled about £1k! Final response also asked for my signed confirmation that I am in acceptance – I returned this yesterday. I am expecting them to come back and state that there has been an error etc. Perhaps it’s not an error but my immediate thought is they have not removed parts from a template! How would I stand legally on this now – it’s a final response after all and asked for my written confirmation. I have this in black and white.
Sara (Debt Camel) says
I suggest you wait and see what happens, it seems like a waste of time to explore all the different possibilites here when you will know soon enough.
you can win complaints at FOS for loans over 6 years old. But there needs to be some proof of what the loans were, if you have emails, bank statements or old credit reports that will often be enough.
Michael says
July 12 2021 I have had no email or payment from the moneyshop and no reply from my emails looks like I have been robbed again
N says
So, I did e-mail the scheme email to enquire as I hadn’t received any email detailing payment or a payment and received the following “As part of the scheme of arrangement your outstanding debt owned by Instant Cash Loans will be automatically set off using the redress awarded. The redress awarded to you does not fully cover your outstanding debt with Instant Cash Loans and they may pursue you for the remaining debt. You can find full information within the scheme documents on the website at”
Am baffled as I don’t believe I owe anything. I have emailed again but received no answer, no automated email like I did the last time.
Louise Quinn says
Hi
Is it right that the money shop is offering loans with 49.9% Apr after only paying 4.31p in the £???
Sara (Debt Camel) says
It isn’t the same company. ICL sold the brand name to a broker, the money went to paying refunds in the ICL scheme.
Darren Poulton says
Just to let people know, I made a complaint to lending stream using the template on here 4 weeks ago, yesterday I was offered £2500 redress and will be paid within a week, anyone who has had lending stream well worth a go
Gemma wallis says
Hi is this right there is a second payment being made please
Sara (Debt Camel) says
yes, see https://debtcamel.co.uk/money-shop-scheme-second-small-refund/. It is expected to be only about 10% of the amount you have already received, so not a lot!
Aaron taylor says
Hmm… to receive 10% of the 4.3% is ridiculous. I mean, to most people it is so little as to be irrelevant. Imagine the bank fees being incurred for each BACS payment, and the wages of the liquidators being kept on to oversee this farce. Oh, wait… I see….
Sara (Debt Camel) says
no, really you don’t see. There are still some assets being realised. The timing of things like resolving legal liabilities with all the shop leases and any resultant tax liabilities/ VAT refunds is not in the control of the people running the Scheme. Their options were to delay all payments until December so they only had to make one payment or have a tiny second payment – they would have been paid the same regardless.
Aaron taylor says
It just seems a bit nonsensical. They could have incorporated the December money into their fee, and paid out one payment in June. Anyway, another 10 quid-odd for me won’t hurt, and I will be glad when this case has stopped dribbling on.
Sara (Debt Camel) says
no they couldn’t because they do not know the exact amount.