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Morses Club goes under – in administration – Scheme fails

UPDATE – March 2024 – the administrators have sold some loans to Lantern and written off all the others. See Morses administration – what is happening to loans. That article is now the current Morses article and if you have any questions, please ask them in the comments there.

Morses Club is now in administration - there will be no more lending, the Scheme has failed

Morses Club went into administration on 17 November 2023.

Morses Club was the largest doorstep lender in the UK after Provident stopped lending in 2021. Last year it had 144,000 customers. Morses also provided some payday loans through a subsidiary, under the name Dot Dot loans – this subsidiary is also now in administration.

Morses employed 373 staff. The administrators have made 101 redundancies so far as there will be no further lending.

Why has Morses failed after setting up a Scheme?

Morses has been in trouble for years, mainly because of the cost of paying refunds to customers given unaffordable loans. It was losing about two thirds of cases at the Financial Ombudsman.

Doorstep lending is a very expensive operation. Morses charged very high interest rates – 343% APR on a one year loan – but it was only profitable when a customer borrowed more than once. And the more times a customer borrowed, the more likely they were to win an affordability claim.

In late 2022, Morses proposed a Scheme of Arrangement, hoping to be able to continue in business by capping the amount it had to pay in refunds.

This Scheme was approved and started in May 2023. It was expected to pay out customers due cash refunds at only 20%

But for Morses to be able to continue lending, it had to be able to refinance its debts, and it hasn’t managed to do this.

This is not a surprise – the combination of affordability claims and cost of living problems make this a difficult time for high cost lenders to find new investors, as Amigo found earlier this year.

What administration means for Morses and Dot Dot customers

The administrators will publish their Proposals for the administration in the next few weeks. It is the administrators’ role to realise the assets of a company and divide them between the creditors. This can take a long time – a year or more.

Customers of Morses and Dot Dot loans, past and present, are potential unsecured creditors because they may have a claim against the company eg for unaffordable lending.

The administrators say they :

will determine a process for agreeing creditor claims and will then contact relevant customers (including those who have already made a complaint), explaining what they need to do next in order to progress their claim.

However, they are warning there will be very little cash to distribute:

Any valid redress claims that are submitted in the administration of Morses Club will be able to share in the Early Termination Funding of £1.2m. At this stage, Morses Club estimates the total Scheme Claims to be in excess of £130m and therefore the anticipated distribution from these funds is not expected to be more than 0.9p in the £ (i.e. if you have a redress claim of £1,000 you would receive a cash payment of no more than £9).

Even if there is almost no cash, it would be normal in an administration for customers with an existing loan with Morses to be able to get their loan reduced or cleared if they have a claim upheld. It is unclear if this will include loans that have been sold to Lantern or Lowell.

What has happened to the Morses Scheme?

The Scheme has been terminated because Morses can no longer fund it. It is no longer possible to submit a claim to the Scheme.

The Scheme had been processing claims in monthly batches, so most claims have already been decided.

If your claim to the Scheme was upheld, you may have been entitled to 3 forms of redress:

  1. a reduction in the balance of any current loan;
  2. an immediate refund in full of some payments since the Scheme started at the end of May 2023, usually a small amount;
  3. a refund in cash for the rest of the redress. This was expected to be paid at about 20p in the pound late in 2024.

Most people with an upheld claim will already have had their balances adjusted and any small immediate refund paid (1 and 2 above.)

The administrators will explain what is happening to people with claims in the Scheme.

I know people are anxious about this, so I will make some GUESSES as to what is likely:

  • anyone whose claim was upheld – it is likely you will become an unsecured creditor in the administration for the cash redress and get a low payout.
  • anyone whose claim was upheld but who has not yet had a balance with Morses adjusted – I hope it will take place soon;
  • anyone whose claim was upheld but who has not yet had a balance with Lantern or Lowell adjusted – I don’t know what will happen;
  • anyone who has a claim rejected and appealed it – my guess is the administrators will consider the appeal;
  • anyone who has made a claim but not yet had it decided – I think this will be treated as a claim in the administration.

Should you make an affordability complaint now?

A loan is “unaffordable” if you couldn’t make the repayments without borrowing more and the lender should have realised this when they gave you the loan.

This could be taking another loan, using more of a credit limit, getting deeper into your overdraft or by not paying a bill. So even if you always paid your Morses or Dot Dot loans on time, they could still have been unaffordable if paying them made your finances worse.

In general, an affordability claim is stronger the more loans you have had, or the larger they are, or the worse your situation was when a loan was taken.

What might you get:

  • you may get very little back if you don’t have a current loan as there is little cash to distribute. But it is possible you could get any negative marks on loans removed from your credit record.
  • if you have a current loan, complaining is more worthwhile as you may be able to get the current loan reduced or cleared.

The administrators will come up with a process for making these claims. This will be explained in their Proposals.

Do you have a current Morses or Dot Dot loan?

Even though they are in administration, you still owe the money. You are not expected to pay the full amount immediately.

The administrators say:

any payments due in respect of your outstanding loan balances should continue to be paid as normal, as not doing so is likely to impact your credit score and ability to borrow.

But there are two reasons why you may not want to carry on making payments.

The first is if you are struggling to pay:

  • you should phone the Morses Customer Service team on 0330 045 0719 and ask for a payment arrangement;
  • if they ask you to pay more than you think you can afford, leave a comment below this article. Or talk to National Debtline on 0808 808 4000.

The second is if you think you are likely to have a claim for unaffordable lending upheld:

  • if your claim is upheld it is likely that any refund will be used to reduce the current balance;
  • if you carry on paying the loan, you may be concerned that you will lose out. This may not be a problem in practice, but it needs the administrators to confirm this;
  • if you stop paying now, your credit record may be harmed – this should be wiped clean if you have a claim upheld but there is a risk it may not be. If your credit record is already poor, you may not be worried about this;
  • some of this should be clearer in the next few weeks.
More articles:
refund sign in neon letters

How to ask for refunds for all types of debt

A dmp - a helping hand to get interest frozen

A DMP – helping you by getting interest frozen

Problem debt look at a DRO

Could a Debt Relief order help you?

Comments

  1. Peter mcmurray says

    This is good news this company were selling loans to your door bringing money to your door,I repaid them back to what I was owed it was not enough but they got there day bad company

  2. Curtis King says

    Most people with an upheld claim will already have had their balances adjusted and any small immediate refund paid (1 and 2 above.)

    The administrators will explain what is happening to people with claims in the Scheme.

    • ludmila says

      when the payments going to started to be paid? I received a letter last year saying payment in 30 days they ask for my bank details and no payment has been made.

  3. Scott Mather says

    Was looking at around 1000 refund as assessed at 6000 unaffordable

    Told it would be around September 2024

    They knew they weren’t ever going to pay …blatant scam

  4. Carly Cunningham says

    I have a current outstanding loan with dot dot loans which I am repaying on a reduced plan due to unaffordability. Can I put a claim in?

    • Sara (Debt Camel) says

      yes you will be able to – how large was the loan? had you had previous loans from them?
      Are the current repayments affordable?

  5. Craig says

    Good they tryed to get out of it by putting this scheme where creditors who they owed would hardly get anything and they got off Scott free I’m glad there gone good riddance to bad rubbish

  6. Ann smith says

    I had my unaffordable claim up held and got notification on the 19th November 2023 to say I would be guaranteed an amount of I think 1246.pounds payed into my bank within 30 days of that date it wasn’t paid to me and that the remaining oweing to me would be payed at a percentage at the end of 2024.i dont owe
    morses club anything. What are the chances of me getting the amount I should have received within 30days

  9. Louise says

    I have had claim upheld by them and had figure set to me via the portal ,I guess we want get anything now, so bad as it clearly show we was due this now we lose out yet again..

  10. Sheila says

    This is disgusting I was told I would get refund in September, now I won’t why should I continue to repay them when they owe me money that’s fraud liars.

    • Sara (Debt Camel) says

      So your claim to the Scheme was upheld in September? What was the calculated refund?
      How much is left on your current loan?

    • Sara (Debt Camel) says

      I think the money owed should be set off against the loan so your balance would be cleared. Yiou could ask customer services why this hasn’t happened?

  11. Jane says

    I would like to kñow if I have to payed the loan I have got with Morses it is about 450.00 left to payed can you let me now thank you

    • Sara (Debt Camel) says

      Hi Jane, how affordable are the repayments? Is this the first loan you have had from Morses?

  12. Laura says

    I have an outstanding balance of just over £1500, I have had a claim upheld and am apparently owed just over £5300, should I continue to make payments?

  13. Helen says

    I got my claim up held in September 2023 saying I would get 326 within 30 days still not recieved it

    • Sara (Debt Camel) says

      It is possible that you misread Morses pretty difficult to read communication. So far as i know, the only payments that they have been refunding in full within 30 days were where someone had made a very recent payment to the loan. The main refund that was supposed to be paid in the Scheme was not expected to be paid until late 2024.

  14. Mcurk says

    I have paid my loan off was told my compensation was £7929 and they said I would recieve 20% of that it is a total disgrace all they have done is rip everyone off

  15. Ann S says

    My goodness I thaught I was owed a lot just over 3000. And yes what a disgrace but they will walk away paying us nothing my compensation was going towards living expenses thaught I’d have an easier xmas but not a chance

  16. Toni says

    I have a current loan with a balance left to pay of £519 and was in the process of submitting an affordability complaint but I had not yet submitted it on the portal, I now cannot access this, am I too late? How do I continue with the complaint?

      • Toni says

        Hi Sara,

        Yes I have had about 10 previously these were all paid off in full. I am struggling to make payments but I am not in any arrears currently.

    • Sara (Debt Camel) says

      You are too late to make a claim to the Scheme as that has been ended so the portal has been taken down.

      However you should be able to make a claim to the administrators. They will explain how to make a claim in the next few weeks. Realistically if your claim is upheld – and 11 loans sounds like a strong case of repeat lending – you will get little or nothing back in cash as there will be very little money to divide up.

      BUT you should be able to get the current loan cleared.

      As you are struggling to pay the current loan, you should consider stopping paying it as the article above says. Tell Customer Services that you can’t afford the repayments and will be make a claim for unaffordable lending.

      If you want debt advice on this or the rest of your situation (do you have other problems debts? behaind on any bills?) talk to National Debtline on 0808 808 4000.

      • Toni says

        Thank you for the advice. I noticed this morning that Morses have been removed from my credit file is this because another company is taking over the debt?

        • Sara (Debt Camel) says

          Thanks – I will look out for other people reporting this.

          This is VERY soon for loans to be sold – Morses only went into administration on Friday. Unless Morses had lined up to sell a pckage of loans (which also seems unlikely with the Scheme underay) I would be surprised this can be done so quickly.

          It may simply be an error. Or the administrators may have decided to stop reporting to Equifax to save money. Or… ?

          • Toni says

            I have been told today by my Morses agent today that I will not be able to submit a affordability complaint now even to the administrators and only ones that have already been done would be upheld. Do you know if there is any truth in this or are they scaremongering?

  17. Kim says

    I appealed 1 of my loans and was waiting for an outcome with the adjudicator which is due any day as they had 60 days. But now they’ve closed the portal how will they reply? Also as my original redress was meant to be £500 does this also mean il get next to nothing now?

    • Sara (Debt Camel) says

      I think that appeal will have stopped. However the adjudicators may come up with another way to consider it – I am afraid you will have to wait and see.

      Yes it seems very likely you will get very little back from that £500 now they are in administration.

    • Sara (Debt Camel) says

      You want to make a claim for unaffordable lending ? How many loans did you have from Morses? Do you still owe them money?

    • Sara (Debt Camel) says

      You should be able to – the administrators will explain how in a few weeks. However if you no longer owe tyhem any money, they are warning that people may get back less than 1% of the interest they paid if a claim is upheld.

      But your wife has a current loan – is this her first one? Are the repayments affordable for her to make – you said you were paying them for her?

  20. Joanwillbye says

    I am glad I paid of my.loans to them back in 2022 as I got told I could not get any more back then so glad I washed my hands of them .as before I was with shopacheck and did not have no problems with loans or agents .but morses has not been good since they took over.would not recommend them after I paid up my.loans so this news don’t surprise me.

      • Helen says

        Didn’t give my new address cos I’m still in same property what a total joke first saying paid out within 30 days then saying in 2024 anythink to avoid paying out

  23. Nicole says

    If you still have a outstanding balance do you still make the payment I only owe £300 and its £25 a week do I continue payments?

  25. Amanda says

    I currently have an ongoing loan and have also had 20 loans altogether from morses some small ones in the middle of the year the big one at the end to help woth Christmas, when I put in a claim he never said when it would be sorted or how much roughly I’d recieve, could you tell me roughly what I’d be getting

    • Sara (Debt Camel) says

      I’m sorry I can’t guess you would have to know how much you have paid in interest.

      BUT you will now only get a tiny proportion of this paid to you. How large is your current balance? Because getting that cleared may be your best hope.

    • Sara (Debt Camel) says

      is this your first loan from Morses? How large is it? Are the payments affordable – paying them doesn’t leave you so short you have to borrow elsewhere?

  28. Sarah H says

    I’ve been with morses club since 2014 think I have paid all mine of not long had one think it was Feb time somes sometimes I struggle to pay because this cost of living…I don’t no if they owe me some money and paying loads of interest all the time is rediculace

    • Sara (Debt Camel) says

      How large are the loans? Are the repayments affordable? Did you have other loans with Morses before these?

  30. S W says

    It was weird after provident went bust then Morses contacted me! They gave me a loan for £1000 all done on the phone no checks!

    Not paying anything back as all are bust!

    • Sara (Debt Camel) says

      If the loan was unaffordable, you should put in a claim to the administrators. If you just stop paying the loan is likely to be sold to a debt collector.

  31. Sharon says

    Hello I have been with morses forever 25 years i asked my representative if they were going to close down i was told no i got a letter about a scheme but was told to ignore but recently i got a letter stating they overcharged me by a great amount near £12k but i would only get at least 20% of it and I wont be able to apply until dec 2024 is this right and if it had brought me hardship paying it as sometime i had to borrow from family and friends to keep up the payments would i not be able to ask that they pay me what they owe me

    • Sara (Debt Camel) says

      i got a letter about a scheme but was told to ignore
      That is shocking, but there is little you can do about it now.

      a letter stating they overcharged me by a great amount near £12k but i would only get at least 20% of it and I wont be able to apply until dec 2024 is this right
      That doesn’t sound right, but everything that happened before Friday 17 November is now irrelevant – Morses is closing and the Scheme has failed.

      Do you have a current loan from them?

  32. Tina says

    I take it I cannot submit a claim now??? I payed my loan off a couple of months ago. I did want to submit a claim but due to a family bereavement that I don’t think I will ever get over and the way I found my family member in my home is something I’m struggling with every day. Other things took priority at the time, like trying to find the money for her funeral ect I wasn’t able to submit my claim and now I think I am too late to submit a claim. Any advice?

    • Sara (Debt Camel) says

      You can’t submit a claim to the Scheme – that has collapsed.
      You will be able to submit a claim for unaffordable lending to the administrators – but the amount paid out is likely to be extremely low as you no longer have a loan from Morses.

      Do you have other debts at the moment?

  33. Paul P . says

    I am currently paying my loan back at a reduced rate of £5 a month with a balance outstanding of £720, do I still repay this and how long for please , this is my second loan with them and they new i was struggling to pay back the first one , so consolidated first int second and here I am , struggling .

    • Sara (Debt Camel) says

      You will be able to put a claim for unaffordable lending into the administrators. Check back in a few weeks and they should have explained how.
      Is the £5 a month affordable?

  34. mary says

    Ive had 26 loans from Moses -previously shopacheck- 2 times a year. My most recent one was £300 without the interest , dont know how much i had left to pay as the debts been cleared & said the award covered it . I’d like to know if i will get anymore back from Morses as the exact amount awarded can surely not just happen to be the amount of my debt? Ive always paid on time but i have over the years had to get credit cards out to help with the cost of living & debts . Im on a fixed pension , morses does not have my bank account details as they need in case im due anything more , or so i thought i read somewhere. Any help with this please Sara?

    • Sara (Debt Camel) says

      You made a claim to the scheme and had it upheld? You should have been sent a claim decision which calculated a refund amount.

      Part of that would have been used straightaway to clear your loan balance.
      The rest would have been refunded late next year at about 20% when the scheme finished.

      But now the scheme has collapsed, the refund amount is likely to only be paid at a tiny amount, less than 1%

  35. Frank mcdonnell says

    My view is everyone should stop paying them, let debt collectors buy they debt and chase you. Just have no correspondence with the collectors and they will go away.

    • Sara (Debt Camel) says

      That isn’t good advice. Much better if you have a current loan to put in an affordability complaint – then your balance may be reduced or cleared, no hassle from debt collectors.

      Stop paying them if it is unaffordable – but also make an affordability complaint and your credit score will be repaired if you win.

  36. Tina Walker says

    I was told i would get over a thousand pounds next year on my claim quess that has gone into there pockets as normal

  37. Nicholas Haynes says

    I have never missed a morses payment so I believe should reduce or remove any oustanding balance on current loans. Its only right

    • Sara (Debt Camel) says

      As a thank you for being a good customer? That is not something that administrators would be legally allowed to do.

      Are your current repayments affordable, they don’t leave you short so you may need to borrow more?

  38. Nicholas Haynes says

    No, and my loan will be clearted in 2 months, therefore my loan is paid and i am currently paying the interest on that loan (£500 and ive paid back £690). I just think it would be a gracious thing to do. Maybe i’m naive but someone somewhere within morse has made a lot of money from me, may be time to give back. But i wont hold my breath

    • Sara (Debt Camel) says

      Administrators aren’t legally allowed to do “the gracious thing” – they are obliged to try to maximise returns to creditors.

  39. Richard Shaw says

    It looks like they have got away with paying nothing, my redress claim via the scheme was £29650.32, that meant according to them a cash sum of 20% being roughly around £5400.00, so with the new rates it just £225, if I’m correct, so been robbed again to the sum of 29400. And yet its not a crime.

  40. J says

    Hi, I have 3 outstanding loans of nearly £2500 I’ve had about 15 in total.. do I carry on paying? Do I stop? How can I put in one of the affordability complaints to potentially get it wiped? I’m due to pay 2 of my loan payment today

    • Sara (Debt Camel) says

      Are paying these loans causing you problems? So you may have to borrow more elsewhere or get behind with bills?

    • Sara (Debt Camel) says

      then you should tell Morses Customer services that you need to make reduced payments and want to submit an affordability complaint.

      the reduced payments will harm your credit score, but the negative marks will be removed if you win the complaint.

  42. Karen says

    Hi
    i had a loan with Morses club and then received an email regarding their scheme due to administration. however i have just received an email from them saying i need to pay the outstanding balance of the loan.
    Could you advise me of my position? do i have to keep making these payments even though the company is in administration?
    thanks for your time

    • Sara (Debt Camel) says

      The loan doesn’t cease to exist because of the administration.

      But you may be able to win an affordability claim to the administrators. Was this your first loan from Morses?

      Is repaying the debt going to be difficult for you?

      • Karen says

        Hi
        ‘The loan doesn’t cease to exist because of the administration.@

        oh ok i didn’t realise that as it wasn’t made clear when i got the email regarding the scheme

        yes it was my first loan with Morses and it will be difficult to repay the debt at the current payment rate. i could payments at a lower rate.

  43. P P says

    I had 2 loans with these people , first one was nearly paid off with difficulty, they new this , then I was advised I could consolidate the last bit ,and have a new one , knowing I couldn’t afford it but gave it me anyway , I’m now paying a token amount until this is sorted.

  45. sarah says

    I have had my final response from Morses which they have not upheld, would you know if I can appeal this? I don’t understand what this means

    “As required by rules made by the Financial Conduct Authority, you have the right to refer your complaint to the Financial Ombudsman Service. However, following the appointment of the Joint Administrators, the Financial Ombudsman Service have confirmed that any new complaints referred to the Financial Ombudsman Service during the Administration will have to be referred back to the Joint Administrators for them to consider. This means that the Joint Administrators will determine whether a complaint should be upheld and whether a customer with an upheld complaint should be treated as a creditor with a claim in the Administration.
    Accordingly, the Financial Ombudsman Service will not be able to further progress any existing complaints about Morses Club and will not be able to deal with any new complaints that are referred to it. In both types of situation, the Joint Administrators will deal with the complaints and keep customers updated on the progress being made to determine those complaints.”

    • Sara (Debt Camel) says

      Once a firm is in administration you can’t take an appeal to the Ombudsman.
      The administrators may be setting up a claims process.
      Do you currently owe money on a loan? Are you making any repayments?

      • Sarah says

        Yes I currently have £570 left to pay at £27.50 a week, I stopped payments last week as I am currently struggling to make the payments.

        • Sara (Debt Camel) says

          that sounds sensible. You should not try to boorw any more money to pay this loan.

          Do you have any other debts?

          • Sara (Debt Camel) says

            I think you should take debt advice on your whole picture the, talk to your local Citizens Advice or if you prefer the phone, call National Debtline on 08 808 4000.

  47. Mairead says

    Making it impossible to pay less , constantly having an agent ringing phone constantly leaving messages, I will not use their App as I was alerted to a security, at the same time of me paying on the app another unknown name was trying to take money too , when I rang Morses I was told I wasn’t the first to complain , the girl on the phone sounded so sincere Nd she was told to try and get cysteine to pay as much as possible, same thing is happening with the local.Agent collectors

    I’ve never missed 1 payment until now they ate not being very obliging to consider smaller repayments

  49. Karen says

    hi all,

    i have just received an email from Morses club stating that they are writing off my debt. They will contact credit reference agencies to record the status as ‘partially satisfied with a zero balance.’

  50. Frank mcdonnell says

    My wife has just got an email from morses saying they are writing off her debt, she owed hundreds but I had told her to stop paying a while back. Glad I did.

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