When Complaints About PiggyBank Loans Should Be Settled
ADMINISTRATORS handling the business of a collapsed payday lender expect to start settling complaints about mis-selling soon.
DJS (UK) Limited, trading as PiggyBank, was one of the UK’s 10 largest payday lenders and employed 57 people at Parkway House on Avenue Road, Bournemouth in 2018.
It provided short-term loans of up to £1,500 at 0.8% interest per day, which equates to an annual percentage rate (APR) of 1,270%.
He was suspended on loan for three months in 2018 when the Financial Conduct Authority raised concerns about its checks to determine whether customers could afford to repay their loans. It entered administration in December 2019.
The administrators estimate that 387,228 former customers could be entitled to claim compensation for mis-selling.
There were 136 claims totaling £76,926 which were not settled before the company went into administration. A further 2,470, totaling £1.4million, have since been confirmed.
The latest report from the administrators, covering the period from December 2021 to June 2022, states: “The administrators will now invite and accept complaints from historical customers who have not yet submitted a complaint to the administration. Administrators are unable to accurately estimate the level of unwarranted repair claims at this time. »
An online tool has been set up that will be used to categorize each customer’s case as eligible for repair, ineligible, or requiring manual review.
“The project is ongoing and is expected to be completed by the end of August,” the report said.
Trustees will then be able to settle claims, either by taking compensation from people’s outstanding loans, or by making a payment if the repair is greater than the outstanding loan.
The report says there will be up to £600,000 for unsecured creditors, but this will have to cover the costs of assessing claims for relief and assessing the claims of other unsecured creditors as well as any payments.
The administrators have so far received claims totaling £1.6 million from unsecured trade creditors.
Administrators collected repayments from borrowers of company loans. The loan book stood at £24.7m when they were appointed.
They collected £502,307 during the reporting period, but recoveries fell to an average of £78,900 every four weeks, from £116,400 in the previous period.