A “Scheme of Arrangement” is in place paying some money to borrowers from the Money Shop, Payday UK or Payday Express who were given unaffordable loans.
The payout is now expected to start in May 2021 and to complete in June.
The claims portal has now closed.
See comments below this article for the latest news.
The following information comes from the Scheme reports. the latest is from March 2021:
- 182,566 Claims were received;
- the uphold rate was about 85%;
- the total compensation value calculated will be c. £340 million;
- the current estimate of the amount people will get paid is 4.2p in the pound
- it is now too late to submit a Claim.
No tax will be deducted from the amount you will be paid.
Where you still owe ICL a balance on the last loan, this has been “set off” against your refund.
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 – see No set off in a Scheme/Administration when debt had been sold? for how these customers can complain.
Contents
Background to the Scheme
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. A claims portal was put live and all Claims had to be in by April 9 2020.
Only 4.2p in the £ – 80p was originally suggested…
This is a dismal update for the 155,000 people that should receive some compensation. Not only will it not be paid for another year, but once again the projected payout has fallen.
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 the latest report is a shocker. 4.2 in the pound is almost exactly what Wonga customers were paid.
The only people that are doing well from these administrations and schemes are the accountants and lawyers.
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.
Did you borrow from other lenders?
If you have borrowed from other lenders, you may be able to get refunds from them.
Read How to make a payday loan affordability complaint which explains all this and has free template letters that have worked for thousands of people.
Updated May 2021
Provident proposes a Scheme
Amigo’s proposed Scheme
Refunds from large bad credit loans
Nigel Bleese says
I don’t know if anyone knows this but provident are doing the same.
Carol says
Yes I had an email some weeks ago
Lynne says
I got a letter in the post! How primitive!
Colin wallace says
Yes I had loans from sister company satsuma
And have written to me about refunds
Looks like might get something from them but not anything going to happen till next year
Richard says
They said I owed them money from a previous loan I have asked them for the credit agreement but they have not sent it me will I still get the full 4%
Sara (Debt Camel) says
are you disputing the previous loan exists? or saying you have repaid it?
You need to be clear why you are disputing you owe this money – the lender not being able to produce the CCA agreement is not proof on its own that you do not owe the money.
siobhan says
I have the exact same situation as you Richard. They have admitted they don’t have the CCA, yet they still think they can take the money.
I don’t understand why they can take money, when they have no valid proof that the debt was ever taken out, let alone the amount. If that is the case they could say you owe any amount and you wouldn’t have a leg to stand on
Gayna says
I remember playing the waiting game for the wonga pay outs and I was checking daily getting myself in a tizz about it and one day it was just there within the time frame they gave but near the end so realistically I wouldn’t be expecting payment until the end of may, start of June and as long as it appears before the end of June then technically they’ve done what they said they would.
RD says
It’s been repeatedly put back – April, May – now June. It’s a farce. There should be a penalty for this delay and/or interest. How can anyone have confidence they will ever see a penny when this keeps happening?
Sara (Debt Camel) says
I am expecting the first payments to be made in May.
Hayley says
I don’t think it’s helpful saying “we knew what we were getting ourselves into”. Obviously some people had NO other choice! The point is fat cats shouldn’t be allowed to run off with millions of pounds through peoples distress. If we are getting compensation it’s because it was lent irresponsibly. If they had taken proper protocols and checks we wouldn’t have been in a trap and borrowed for so long. Companies like this make me sick. And I genuinely hope they receive their karma.
John says
I have to say that ‘within the next few weeks’ suggest that if payment is made in May we will be lucky .
More ironically KPMG have announced that all their staff will be paid a 4% bonus of their salary this year. I am sure you will all no doubt wish to join me in congratulating them on the thoroughly professional job and well deserved bonus that they will be getting this year. I think not.
I have already sent an FOI request in respect of the scheme costs since I would clearly not expect any such costs to include bonuses.
Suse says
KPMG’s ability to pay a bonus is not relevant. I know it’s disappointing to be getting such a small amount of the total due but it is not KPMG’s fault.
Tom says
KPMG has to take responsibility for the costs occurred (someone said £8m), the confusing and lack of communications, and for failing to buy back loans sold to PRAC. I would like to know how much they offered to buy back the loan book, did they offer 4.2p in the pound or was it closer to 1p in the pound? we all lose out if they offered less than the pay-out value.
Sara (Debt Camel) says
KPMG aren’t the administrators here. This is not technically an administration. It is a Scheme of Arrnagament. ICL are making the decisions and KPMG are just brought in to write a report on how it is going every 3 months.
Matt says
Be very clear and specific in the FOI request. Would love to kmow the reeponse you’ll get.
Linda says
I got a letter saying I was geting 6000 pound and now that’s gone down to 200 hundred pound big drop I think and I still not received it
Natalie says
Has anyone received anything yet from the redress? Just wandering as they said they would start making payments in may
Sara (Debt Camel) says
No.
Linda Steatham says
I phoned them today said payments end of May
Lynne says
I don’t know why they couldn’t just say that in the first place.
Carol says
Is there a reason my comments aren’t being shown please? My last comment was regarding an email I had received telling me they have to put me back in the same financial position I was in before taking out the loans. And made the point that 4.2% isn’t doing this
Sara (Debt Camel) says
The reason is because I have been busy doing other things :)
Carol says
Sorry Sara I didn’t mean any harm as I’m thankful for your input and help ..
Sara (Debt Camel) says
no problem – have a good weekend!
Marlon James says
Its just a waiting game now.
Sue says
We have been waiting nearly a week now. Look at how quickly that week has gone by…… it shouldnt be too difficult to wait a couple more… hopefully🤔
Kaell says
Received this reply today from them after I disputed I still owed them money
Good Afternoon
Thank you for your email. We have updated our records and confirm this debt has been paid.
We will be contact you within the next few weeks to confirm the full breakdown of how much cash you will receive.
If you haven’t disputed the owing balance I suggest you do now. If you have and your debt was sold to Prac/ bw legal like mine was and you paid the outstanding then log into the bw legal portal it has the details of the loans they brought from instant cash and if you click on the more info tab it also shows the actual date of assignment . Use this in your dispute email and also threaten them with a SAR request of all the data they hold on you( they must legally comply to this request no exceptions). That’s what I did and they replied within a week with the above reply.
Charlie H says
I’ve emailed them three times with the proof the loan they say I still have outstanding was cleared and no longer exists. I know they have read them as I got read receipts back but no reply to any of them. Totally appreciate that the amount I’ll get is very small but to have that reduced by 50% due to an error on their end is clearly not right. Question is, if they still go ahead and pay out based on that error, what recourse do we then have?
Kenneth Kennedy says
so there is £340 million in the fund and there was 182,566 claims of which 85% where upheld so what i like to know is how much is being taken by the administrators because it seams they are the only ones making money out of this and a lot of it to and to be honest any cost of the scheme ie the setting up and administrators cost should be met by the owners of icl and not the people that where ripped off
Sara (Debt Camel) says
This is a Scheme not an administration.
The estimated costs of the Scheme are given in https://www.themoneyshop.co.uk/media/documents/March21Quarterly.pdf
ICL is going into liquidation. There is no one else to pay these costs.
The people that are to blame for the low payout are the FCA. They allowed the Money Shop, PaydayUK and Payday Express to carry on lending in breach of the FCA’s rules. And they have failed to provide for a back up when a lender goes under. If a PPI firm went bust, people owed PPI refunds were paid in full from the Finacial Services Compensation Scheme (FSCS) – the FCA decided not to include lenders in the FSCS.
Sharon says
Hi Sara,
Do you think it would be worthwhile complaining to the FCA about them not including payday lenders in the FSCS? I realise it would probably take lots of people to complain, if they did all complain, I just wondered if there would be any chance of them including payday lenders.
Thanks for all your help and support on this website it’s much appreciated x
Sara (Debt Camel) says
It’s an interesting question – ask me again in a week or so.
Sharon says
Will do thank you x
Matt says
Hello
Is there time limit before we can apply for irresponsibly lending for a firm? I contacted cash converters this regarding pay day loan which I think I took out more than 7 or 8 years ago. I just got a email from them saying they have no records of me on there database.
Apparently they deleted all records after six years, is there any way around or I’m very late to for this.
Thanks
Sara (Debt Camel) says
Please ask this on the general payday loan refund page https://debtcamel.co.uk/payday-loan-refunds/
Csmith says
Very sad this government do not help its people. Many included, who took these loans are from the ethnic minorities and am sure the lawyers are not. So what do you expect?
Big pay day for their brothers the lawyers.
You will be lucky if they don’t try to delay payments further blaming third round of covid, just to suck more blood money.
Vanessa says
I just want to say a huge thank you to Sara for all her help and advice and give you a massive pat on the back for patiently repeating yourself time after time to the same questions! Personally by now, I’d have lost my rag and said ‘read the 100+ above ffs!’
People are always too quick to have a moan about customer service but will rarely give praise – so thank you for all your hard work x
Dave says
Thats so true, this webpage has been a real lifeline.
Jane. Brand says
Even myself I have not posted anything on this forum but I am very encouraged by het replies and tolerance. Once this problem is sorted she deserves a good holiday. Let’s now sit back and wait for our payment. The month of May will soon be behind us and hopefully our money in our banks. We hope.
ROBERT says
Yes, all good as & when the pittance is paid, and then we (some) switch to the QuickQuid page…Ad infinitum!