Morses Club went into administration in November 2023.
Morses Club was the largest doorstep lender in the UK after Provident stopped lending in 2021. See Morses Club goes under for details about why it failed.
In March 2024, the administrators have sold or written off all outstanding loans. This article looks at what has happened, what happens to customers’ credit records, and whether customers may get any redress for unaffordable lending.
How many current loans are there?
When Morses went into administration in November it had about 68,000 current loans. Roughly a third were in default.
Morses loans were typically between £300-1.500 and most recent loans were short terms for 3 or 6 months. Some of the current loans will probably have been repaid by now.
On 6 March 2024, the administrators announced that they have:
- sold some loans to Lantern;
- written off all the remaining loans
- closed the Morses Operations Team. It will no longer be able take phone calls or emails from customers or answer any queries.
Loans written off
Good news!
People with loans that have been written off have started receiving the following email from Morses:
We have recently conducted an account review and are pleased to inform you that we have taken the decision to write off your outstanding balance.
This means as of today you will no longer be liable for this amount and your balance has been reduced to zero.
We will notify the credit reference agencies of our decision. Your credit file should shortly be updated to show as partially satisfied with a zero balance.
This is good news as you will no longer be asked to make payments.
The effect on your credit record
Morses are adding a marker on your credit account to show that the loan is “partially satisfied”. This is visible to other lenders you may apply to but it does not affect your credit score. If your Morses debt already shows missed payments or a default, there is no reason to be concerned about this partially satisfied marker.
When there is a default date on the credit record, it will drop off six years after that default date. If there is no default date, just payment arrears showing, then the record will stay for 6 years after it has been written off. So it is in your interest that the default date should be as early as possible as this means the record will drop off sooner. The credit reporting rules say that a default should be recorded when an account is 3-6 months in arrears.
There may be problems with your credit record – perhaps some dates are wrong, your payments have not been accurately recorded, or Morses failed to add a default as soon as it should have.
If you think there is a credit record problem, you can no longer ask Morses Customer Services to correct it. Instead, you can ask the Credit Reference Agencies to correct this. See Correct credit records by “suppressing” them which explains what to do.
Loans sold to Lantern
Lantern is a debt collector. If your loan has been sold (the administrators use the legal phrase “legally assigned”), Lantern will send you an email about this.
You don’t have any right to object to this sale. Lantern now has the same rights to be paid by you as Morses Club had. And Lantern will update your credit record from now on.
If you are still paying Morses, you should stop and instead set up payments to Lantern. If you can’t afford the repayments, talk to a debt adviser.
I asked the administrators about affordability complaints and the loans sold to Lantern. They say :
the administrators proactively applied the Scheme’s Claims Methodology to customers’ loans to determine whether loans were affordable and/or sustainable or not and, where required, adjusted customer’s loan balances under the same criteria that was originally agreed in the Scheme even if no claim had been made. Only outstanding loan balances after this redress was applied was available for sale to Lantern and as such unaffordable lending complaints should have been addressed.
However, customers are still entitled to make a complaint and can do so by contacting complaints@lanternuk.com at Lantern. Lantern is now responsible for dealing with complaints in the first instance where they have acquired a customer’s loan.
So it may be that your balance now owed to Lantern is lower than the previous Morses balance if your loan was considered to be unaffordable.
What about refunds for affordability complaints?
The administrators say that there will not be any money to pay unsecured creditors with a claim in the Administration – this includes customer who should be owed money for unaffordable lending claims.
However, there may be a small amount of money that can be distributed from the pot that Morses put aside when it set up the Scheme that has failed. The administrators say:
- a dividend may be made from the Early Termination Fund (“ETF”) to customers with redress related claims. Any distribution is expected to be less than 0.9p in the £ (i.e. if you have a valid redress claim of £1,000, you will not receive more than £9 and it may be that you receive £nil).
- We are currently seeking Court guidance on the approach to be adopted to distribute the funds from the ETF and we advise customers continue to monitor this website for further updates.
So any cash refunds paid are likely to be tiny.
This is very disappointing for customers who had been told they had an upheld claim in the Scheme,
Warwick says
Lantern were a particularly unpleasant DCA although I have not had contact for a few years. Do not be bullied into paying more than you can afford. At least that is my unqualified advice.
Miss Kimberley J Maxwell says
When will we know if we will get any of the claim money back as it was settled and can we take this further to anyway else thanks
Sara (Debt Camel) says
So you made a claim nd had it upheld? Did you still Owe a balance?
Miss Kimberley J Maxwell says
I didn’t owe them anything my claim was due to be paid to me in September 9,500
Lesley Finn says
Hi Morses rejected my claim for unaffordable borrowing, they borrowed me one loan and after only paying around 300 of a 600 loan asked me did I want anther, the Womam at Morses even helped me fudge the figures to make it look like I more income ( I desperately needed the cash at the time stupidly) they gave me anther top up loan with no checks on any figures put down, my debt has gone to lantern which I’ve received emails today, can I make a irresponsible claim to lantern or am I wasting my time amd offer them a small amount a month as I can’t afford what they want back a month they should nener have borrowed me more thanks for your help
Sara (Debt Camel) says
until we know what the administrators are going to do about affordability complaints it is hard to say anything.
Richard Shaw says
I had a claim with a win of £29500 before morses scheme of arrangement went in administration. I was looking at at least £6000. Now all I will receive is 26.00 if any. These scheme should not of been offered unless they are followed through. I know a person that was due a lot more and borrowed off a family member expecting the redress of around £10000.
I do not know what the are foing to do. The administrators should not of shown any information until the amount was 100% secure
Peter says
I had a door step loan with cash in hand I was paying faithfully until they went into administration I then did not pay they took a bad credit reference against my file and because of this it affected my credit file what can I do to stop this
Sara (Debt Camel) says
Has the debt been sold to Lantern or written off? Was this the first loan from Morses?
Terry says
I had missed payments with Dot Dot Loans (showing as a negative report on my credit file under the name Shelby Finance Ltd). Do you know if it’s possible to have this removed or suppressed now the company is in administration?
Sara (Debt Camel) says
Well really you need a reason why the loan should be removed. Are any of the dates or missed payments wrong? How many missed payments were there? Did you have previous loans before this one? How large was it?
Chris Imrie says
I find it preposterous that Morses Club customers, who suffered detriment due to the firms ill lending practices, may only share £1.2 million from the ETF.
Interpath are estimating their fees for this administration to be c£1.44million! There is also a caveat that Interpath will take their costs out of thr £1.2million ETF, reducing the potential redress to customers further. Another example of injustice for the consumer.
Sara (Debt Camel) says
The administrators are often the people that seem to do best out of an administration. But realistically they were not responsible for Morses lending, or the failure of the scheme.
Deborah wood says
It’s unfair that some got sold to lantern and some got written of..my loan left to pay is less then somebody else’s that got written off
Sara (Debt Camel) says
had you missed payments to the loan?
Is the balance now with Lantern what you would expect? The administrators have now told me that before each loan was sold, they put it through the Scheme Affordability Checker and if it was unaffordable, the balance would have been reduced.
Deborah Wood says
Yes I had missed payments, I was paying what I could when I could as my husband had passed away so had a big change income so could not afford the regular payments.. just seems unfair that I know 2 people who both owed over £1500 and both there’s got written of mine is £700
Sara (Debt Camel) says
very sorry to hear that. What is the rest of your financial situation like at the moment> Do you have other debts?
How large was the loan at the start? were the payments affordable then?
Deborah wood says
I have kept up to date with utility bills and rent.surley they should of checked my financial situation with me to puy it through a affordability checker..my morses collected had Been told my situation as to why I could not make the required payment weekly..I can not remember the original loan amount.. I am a widow on esa so not a high income. My payment amount was affordable at the time of taking out the loan
Sara (Debt Camel) says
“Affordability” is a test about your situation when the loan was taken out. If you were ok at that point, you will not win a claim about affordability.
But a creditor, including Lantern, has to take your current situation into account and treat you fairly.
Are you renting? Social or private?
Deborah wood says
I rent from a housing association.. I’m trying to downsize my house so that I do not have to pay the vedroom tax but yhebprocess is not easy
Sara (Debt Camel) says
Can I ask if you own a car worth more than 4000?
Deborah Wood says
I do not have a car as I do not have a driving licence
Sara (Debt Camel) says
then I suggest you talk to a good debt adviser about a Debt Relief Order (DRO). See https://debtcamel.co.uk/debt-options/dro/. that would wipe clear the loan now with Lantern and all your other debts as well – getting you a clean start.
Phone National Debtline on 0808 808 4000. They are very nice.
Deborah wood says
Thank you for your help
Zoe Morton says
Mine been payed by my dro so please stop messaging me thank you
Sara (Debt Camel) says
if you are getting emails, you can unsubscribe from them
Carly Spence says
How long does it take for a default to be taken off your credit score if the debt is written off?
Sara (Debt Camel) says
it will drop off 6 years after the default date that is showing on your credit record. If there is no default date, it just shows as in arrears, then it will drop off 6 years after the write off.
BUT you can probably get the record removed if there is anything wrong with it – wrong default date, missing default date, wrong balance, wrong payment details etc See the article above which has a link for what to do
Marie says
Does this mean not get pay out we was promised told get it April 2024 now September not sure what believe what happening with pay out
Sara (Debt Camel) says
If you had a Claim upheld in the scheme, now it has collapsed any payout is likely to now be very tiny and will be delayed.
Stephen says
Hi, Sara
Was it the case that all complaints submitted before the 11/08/2022 would be settled in full if upheld. Did they not have money set aside for this then went for a scheme to limit the cost of further claims.
Sara (Debt Camel) says
No, a scheme affects all complaints in progress as well as new ones
Radio Rig says
Peter, that’s rough about the bad credit reference – have you tried disputing it with the credit agencies?