UPDATE –
- The administrators published their 1st progress report on 24 September.
- They had identifed 256,000 Wageday Advance customers as being owed redress for unaffordable payday loans. Of these, about 100,000 claims were submitted by customers (99,416 electronically and over 1,000 manually) before the deadline at the end of August.
- The administrators expect customers who sent claims will receive between 4.5% and 5.2% of the amount of their claim.
- The payment will be made in or before May 2020.
Contents
Summary of the administration
Curo Transatlantic Limited (CTL) had two brands:
- Wageday Advance (WDA), a mid-sized payday lender; and
- Juo Loans, a small guarantor lender.
CTL entered administration on 26 February 2019 because of the number of payday loan affordability complaints they were receiving. They appointed KPMG as Administrators.
SpeedyCash was also part of the same group as Wageday Advance. It was a brand name of SRC Transatlantic Limited which went into administration at the end of February 2019. See SpeedyCash in administration – send affordability claims by end July 2019 for the separate administration proposals and arrangements for SpeedyCash.The Administrators published Proposals for the administration in March and a set of FAQs.
- The Administrators proposal were approved by a ballot of creditors.
- Outstanding loans, less any compensation calculated, have been sold to Shelby or Lantern.
- The Administrators used a Claims Calculatorto decide which WDA customers may be owed compensation for inappropriate lending;
- 256,000 customers owed compensation were sent emails inviting them to submit a pre-completed Claim. The deadline for Claims to be submitted has now passed.
- In September it was announced that c.100,000 claims were received and that the administrators excpect to pay c. 5p in the pound to customers who made a claim.
Background to the administration
Like other payday lenders, WDA had seen increasing numbers of affordability complaints for several years.
In June 2018 WDA asked KPMG to look at a Scheme of Arrangement (“Plan A”), which would cap its liabilities for historic complaints. At this point, WDA was already struggling with affordability complaints – the cost of refunds, the administrative overhead and the FOS fees.
From June-September affordability complaints increased significantly, with 16,000 being received during the four months.
In October WDA asked KPMG to also look at the alternative of a sale of the business (“Plan B”). CTL’s parent company, the American subprime lender Curo, said:
we do not believe that, given the scale of our U.K. operations, we can sustain claims at this level and may not be able to continue viable U.K. business operations without action by the U.K. business to reduce the risk of claims relating to historic lending.
In the autumn, WDA stopped responding to customer complaints within the allowed 8 weeks. Many customers did not receive a response for 16, 20 or more weeks.
As part of the planning, a Claims Calculator was developed to assess all previous lending. This estimated that the total potential liability for affordability complaints could be as much as £223m.
In January 2019, Curo announced it had asked the FCA to say whether it would object to a Scheme of Arrangement which would cap CTL’s liabilities to pay refunds for unaffordable lending at c £18 million. The Administrators admit that:
redress creditors would … have faced a very significant shortfall against the value of their claims in the Scheme.
It is hard to imagine why the FCA might have thought this was a reasonable offer.
On 19 February, the FCA said it needed further information about the proposed Scheme. At that point, CTL decided it was unlikely to get Plan A approved. It decided to appoint administrators and proceed with Plan B. At this time it stopped offering loans through the Wageday Advance website.
Sales to Shelby and Lantern
Immediately on administration – some accounts sold to Shelby
The Administrators announced a sale of much of CTL’s infrastructure to Shelby Finance for c £8.5 million. Shelby currently trade as Dot Dot, a very small payday lender, and are a subsidiary of the doorstep lender, Morses Club. This is known as a “pre pack” sale – it was all planned before the administration started.
50,000 CTL customers, including all Juo customers, have had their loans transferred to Shelby.
The accounts sold to Shelby were considered to be “in good standing” with no arrears. The Administrators say “a small number” of people who were transferred to Shelby may get some compensation for unaffordable lending – those affected will get an email from Shelby about this. But most people transferred to Shelby will not be getting any refunds.
650,000 other CTL accounts remained with CTL. Many of these are accounts that have not been used for some time. Many current and old customers may be owed compensation for inappropriate lending.
Outstanding loans sold to Lantern in May 2019
No payments for outstanding loans were taken by the Administrators. Balances were frozen, with no further interest or charges added. Credit records will be corrected so no late/missed payments will be recorded because of this.
Many people with outstanding balances may have these reduced because of redress, see below.
In May 2019 the loan book – that is the legal term for all the outstanding loans – was sold to Lantern, a debt collector previously known as Motormile Finance.
If your loan has been sold, you will get an email explaining this. You will need to make a payment arrangement with Lantern for the balance outstanding.
I would expect Lantern to be understanding if you can’t make a high monthly payment. Don’t offer so much you will have to borrow from someone else to make these repayments. No interest will be added from here on.
Determining complaints and calculating redress
WDA stopped its normal complaints handling when the administration started. It has not paid any refunds after administration, including refunds that were agreed before administration.
Under the Insolvency Act the Financial Ombudsman (FOS) couldn’t carry on with their decision making once a firm goes into administration. All WDA complaints with FOS have been returned to the Administrators to settle.
The Claims Calculator
The Administrators’ Proposals explain how they are deciding if a customer should not have been given some loans and what the compensation, which they call redress, is for those loans. Here is a brief summary.
The Administrators have put all loans from Wageday Advance, past and present, including those over 6 years old, through the Claims Calculator that has been developed.
This is being used to reduce administrative costs. If complaints were looked at individually it would significantly reduce the money left to settle the complaints which were upheld.
The Claims Calculator is intended to give roughly similar results to typical FOS decisions. A loan is determined to be inappropriate by the calculator if it fails any of three sets of criteria:
- affordable – looks at loan size, income and expenditure evidence;
- sustainable – looks at the number of loans, the gaps between loans, roll-overs and how much loan amounts increased;
- responsible lending – looks at what a CRA check showed eg defaults, debt management and numbers of other payday loans.
For inappropriate loans, a redress amount is calculated as a refund of interest and charges, plus 8% statutory interest. Adding these up gives a total redress amount for each customer.
If you have already had an offer or a FOS decision
The Administrators will set your redress amount at the largest of:
- what the Claims Calculator says;
- any Final Response offer from WDA; and
- the value of redress determined by the Financial Ombudsman.
Customers who still owe a balance
People who had a balance outstanding and who should get redress got an email from the Administrators with the subject Important information about your loan.
These emails were sent to anyone with a balance and a redress amount calculated, even if they haven’t submitted a complaint.
The Administrators’ proposals were agreed, so the numbers in these emails are no longer “provisional” but final.
If you still owe money after this reduction
Here is an example of the key figures:
- Outstanding loan balance at 25 February 2019 per CTL’s records 420
- Less: Provisional balance adjustment (165)
- Provisionally adjusted loan balance 255.
If your redress is smaller than the balance, you will still owe some money – £255 in the above example.
Where someone has only had one loan, it looks as though the balance has been reduced to the amount borrowed less what the customer has paid so far. This is what FOS would have decided if the loan was unaffordable.
The Administrators will contact you in the next few weeks to give you the bank account details to make payments to. If you already have these details because you were in a payment arrangement, you can make payments now if you want.
The Administrators will be selling outstanding loans to a debt collector. If you only have a small balance left that you can easily clear, you may prefer to do that. Or you can plan to make an affordable payment arrangement with the debt collector.
If the redress is larger than the amount you owe
If your calculated redress is larger than your balance your email will look something like:
- Outstanding loan balance at 25 February 2019 per CTL’s records 240
- Less: Provisional balance adjustment (240)
- Provisionally adjusted loan balance Nil.
You will then get a further email (see below) saying you are owed redress.
If you are owed redress
You will have been informed of the calculated amount
The Administrators sent emails with the subject Important information about your redress claim.
These say:
- what your calculated redress amount is;
- that you are an unsecured creditor with a claim against CTL for this redress amount;
- there was button in the email to submit your claim – the deadline for doing this has now passed. You can no longer submit a Claim.
“My bank details have changed”
The Submit Your Claim page showed the last 4 digits of your bank account number that WDA had on file.
If you have submitted the Claim by the the deadline (now passed) you can later email the administrators with your new account details. There is going to be time to get all this sorted out, you don’t need to worry about this.
Payments will be made before the end of May 2020
The money the Administrators have left will be divided up between the unsecured creditors, including all the customers who have subitted claims and who the administrators consuder are owed compensation.
The administrators expect that they will pay between 4.5% and 5.2% by the end of May 2020.
Credit records
The Administratorswill update customers’ credit files to remove of credit records for loans that they have decided should be refunded because they are inappropriate.
Contacting the Administrators
The contact details are:
- Customer Service Centre: 0330 094 5695
- customerservice.curo@kpmg.co.uk
Updated – 25 September 2019.
News about high cost credit
Is your guarantor loan unaffordable?
Is a DRO always better than an IVA?
Lucy says
Hi all received an email from curo today.
Part 1
“ Dear Ms…
CURO Transatlantic Limited (formerly trading as WageDayAdvance and Juo Loans) (in Administration) – “CTL”
Court number 1418 of 2019
Joint Administrators – Howard Smith and Ed Boyle
As you may already be aware, Howard Smith and Ed Boyle were appointed as Joint Administrators of Curo Transatlantic Limited (“CTL”) on 25 February 2019. CTL formerly traded under the brands WageDayAdvance and Juo Loans.
It has been identified that we have received an excess payment in respect of your loan account since 25 February 2019 (“an overpayment”). The potential causes of this overpayment are:”
Lucy says
Part 2
“You have made a payment that exceeds your remaining loan balance;
You have a redress claim against CTL which was offset against your loan (“a balance adjustment”), and you have made a payment that exceeds your adjusted loan balance;
Your loan has been written off by the Joint Administrators and you have made a payment following 25 February 2019; or
Your loan was written off by CTL prior to the appointment of the Joint Administrators and you made a payment in relation to your loan after the Administration began.
We will shortly be making a payment into the bank account which we hold on file for you to refund your overpayment against your loan. We expect this payment will be made in the next two weeks.
Please note that if you have entered into an Individual Voluntary Arrangement (‘IVA’) with your creditors, it will be your sole responsibility to declare the receipt of unanticipated funds to your IVA Supervisor (if required per the terms of your IVA).” Sara can you please advise if this refund is in addition to my redress claim. Any thoughts are appreciated.
Sara (Debt Camel) says
have they said you have a redress amount? how much?
have you made a payment to them since the administration started? how much?
Lucy says
Hi Sara I received an email on 4th April stating ‘Estimated redress entitlement as at 25 February 2019: £865.45’.
I did have a DMP with Step Change which I have now completed. I never paid Wageday/curo directly, and from what I recall with Step Change they stopped payment as soon as they entered administration as I called for confirmation at the time.
Sara (Debt Camel) says
You will have to ask StepChange if they have paid them any money since administration.
Chris says
Got a similar message about an payment over the balance. In my case, won’t be more than a few pounds. I have sent them an email with updated bank account details and will let you know what happens.
Darren says
I got the same email on Monday
I’ll probably get about a tenner
Darren says
Anyone been paid out anything yet ?
Sue says
I received an email last Tuesday stating that a refund payment was being sent to my bank account within the next two weeks. Has anyone received the same email and received a payment yet?
Zena says
I had the email last Tuesday I had a redress of 1800.00 and have recieved a payment of 10.00 what a joke
Sue says
In answer to my own post, I have received a payment of just £2.17 this morning from Curo. Words fail me! My original redress sum was for £1117.00. What more can I say??
Marty says
Seriously ? 0.2 % of your claim. That’s got to be an error !!
Sara (Debt Camel) says
They are refunding some amounts to people where they have found there was an error and a loan had been overpaid. This is separate from the calculation of redress. It may be these small amounts relate to that?
Sue says
Is it worth me querying this with Curo? Or do you think that it is correct. So disappointing to say the least.
Sara (Debt Camel) says
Did you get an email recently about a refund because of a loan overpayment?
Sue says
Hi Sara In answer to your question I got an email due to ‘overpayment’ of my loan. I am guessing its not worth challenging the amount that I received. Its just so unfair to start mentioning the sum of £1117.00 in terms of a redress refund figure and then to send just £2.17.
Sara (Debt Camel) says
ok then the amount you have had only relates to the overpayment. You should still get paid the percentage of the redress on your loan that everyone else will get – expected to be about 5% – in January or whenever they finalise that.
Sue says
Thank you Sara for your response. It has made me feel a lot better. I await another payment from Curo in the new year
Diddy says
I received £317 on a nearly £8,000 redress. Bit upset when the redress figure would have paid off a few things and blame myself for not doing this before but better than nothing (considering that I would never have know I could complain until I saw this site). Am I a similar position with Money Shop and Wong’a so will see what happens there…….
Pretty much just over £0.02 in the pound. Would imagine the others in administration will be pretty much the same.
Sara (Debt Camel) says
more like 4p in the £? What was your exact redress figure?
Marty says
I got that figure too working it out.
Not received anything though will maybe give them a call for an update.
Diddy says
Sorry you are right my bad calculations…..maths ain’t my strong point 😂
No emails, no notifications, nothing from the adminstrators…..just straight into my bank account this morning.
Turtle says
Has anyone had any luck with speaking to WDA? I have contacted the administrators a number of times over several months asking for a detailed list of loans but it’s like getting blood out of a stone. They wont budge.
I want to get the loans I had with them off my record but they wont even tell me which loans they have “accepted” as unaffordable and void.
Who do we complain to when the administrators are incompetent?
Joseph says
I know how you feel, they’re terrible – Scripted responses every time you call them
victor mullen says
So we are looking at %5 of total redress, think i will give mine to charity
Marty says
Just spoke to them on phone no payments have been made it was only for those who overpaid.
Payments still scheduled for May 2020
Diddy says
Interesting, didn’t think I had overpaid anything but will need to check back my statements…..thanks for the info.
Nicola says
My debt was sold to a debt collection agency. My redress amount is more than what I owe. Will this be taken into account or can I request the balance be wiped by the debt collection agency?
Donna says
Hi Nicola,
My debt was sold to Moorcroft so I’ve emailed them this evening to see if I should continue paying them, my redress is £88 more than my outstanding balance. I’m in a DMP with stepchange and they advised me in April to continue paying Moorcroft when I sent them the email. I’ll let you know if I get a response, I couldn’t see the answer to this on the FAQ’s of the administrators website.
Kelly Burton says
Hi I have received my overpayment this week which was £34 I understand that this is not a redress payment as these are still to be paid out in 2020
Maths is not my strong point either I have an estimated redress amount of £494.76 I take it that I will be luck to get £20 back ?
Josh says
Yes this is correct unfortunately the maximum you should expect to receive at the point of redress is £24.7 that’s if they pay the 5p in a £1 which is max. Don’t worry we are all not happy with this it’s disgusting I’m owed £3211 redress and looking. At receiving no more than £135… crooks they are all at they have put many people in debt and ruined there credit then the end outcome is this.
Amanda says
Do you think we could take it to the company still trading in America
Sara (Debt Camel) says
No.
Ciaran says
Hi
I know the deadline has passed for wage day advance. I have an outstanding loan of 550 from lantern, who are collecting for WDA. I have paid off 150 so far. This loan was so unaffordable for me and it will take another 9 months to pay off my plan.
Do you think I could write to WDA/Lantern to claim for an unaffordable loan. I don’t want redress I just want the debt cleared or the amount diwn to a minimum.
Advice please. Thank you so much for this site.
Sara (Debt Camel) says
Was this your only loan from WDA?
Ciaran says
Yes. Dating back 2016
This loan was used to pay back other loans and charges.
Sara (Debt Camel) says
The realistically it is VERY unlikely that WDA would have upheld your Claim for a refund if you had made one in time. And it is now to late to try.
And there is no good reason why Lantern should clear or reduce the debt. Sorry,
If the payments to lantern are more than you can manage, you can ask for these to be reduced.
Ciaran says
Because I believe I couldn’t afford this loan. Is it possible if I pay it back that I can get any negativity cleared from my credit file? Sorry for all the questions. Many thanks by the way
Sara (Debt Camel) says
You can only win an affordability complaint if the lender should have realised before they gave the loan that it was unaffordable. If this was your first loan and it was small, the lender isn’t expected to make detailed enquiries so the first few loans are hardly ever decided to be unaffordable.
The only reason to clear the negative mark from your credit record is if you had won an affordabilty complaint. Sorry,
Paul Godden says
Hi
Separate issue but we have had a client at National Debtline that has had a pay day loan debt passed to Lantern collection agency. The client has been told that Lantern can clear the £950 debt for him and he will pay them back £1150? There was no mention or discussion of a loan and Lanterns website doesn’t mention offering loan? Has anybody had any experience of this? It seems odd a collection agency offering a loan like this?
Sara (Debt Camel) says
That is an odd issue.
I suspect your client has misunderstood something. I can’t imagine Lantern have offered him a loan.