PAYDAY lender 247Moneybox has gone bust leaving thousands of customers in limbo over payments and compensation claims.
Customers who are still repaying loans are being urged to continue making payments as usual.
Otherwise, they risk damaging their credit score or being hit with additional charges as a penalty for late or missing payments.
Borrowers seeking compensation for irresponsible lending are being advised to continue submitting complaints.
But unfortunately, you're unlikely to receive a payout as you will be added to a long list of people who the company owes money too – banks and big lenders area priority for repayments.
Harrisons Business Recovery & Insolvency has been appointed as the company administrators to help "conduct an orderly wind down of the business".
Are you due a payday loan refund?
MILLIONS of payday loan customers may be due refunds.
Refund or compensation is often given where the loan was mis-sold or where affordability checks weren't stringent enough. Here's all you need to know:
- Customers who've paid off payday loans debts can still claim. Even if you've paid off your debts you may still be able to get a refund if you struggled to repay the money at the time.
- If you're still paying off payday loan debts you can still complain. You can complain if you've struggled to make repayments. If your complaint is successful it could lower the amount you owe.
- You can still claim is the firm no longer exists. Big firms such as Wonga and QuidQuick no longer operate but that doesn't mean you can't get some money back. Customers can still make complaints about firms which no longer operate, although it is less likely that they will receive a refund as they will have to apply directly to administration firms. Although, if their complaint is successful and they still owe debts this could mean they have to pay back less so it's still worth complaining.
It's not clear exactly how many customers the firm had on the books when it went into administration but it's believed to be in the thousands.
The lender provided loans of between £80 to £200 for new customers that was to be repaid within a month, and up to £800 for existing borrowers.
It's the latest payday lender to collapse, following the demise of one of the UK's biggest short-term lender, Wonga, in August last year.
QuickQuid, WageDayAdvance and Juo Loans have also called it a day, plunging millions of customers into financial uncertainty.
Wonga customers have reported that they've since received compensation payouts even after it went bust but they have been much smaller than anticipated.
Many firms have blamed a rise in compensation claims over irresponsible lending for their collapse.
Administrators say they haven't ruled out a sale of the company but also that it is working to settle its debts to creditors.
In a statement issued on the 247Moneybox website, administrators are warning customers that fraudsters may seize the opportunity to trick you into handing over your cash to them instead.
How to claim compensation from payday lenders
IF you think you are owed compensation from a payday lender then here's how to claim according to money blogger DebtCamel:
You'll need to prove that you couldn't afford to take out the loan at the time that you borrowed it. If having the loan meant that you couldn't pay your bills or other debts then you were irresponsibly lent to.
You may also me entitled to compensation if you had any late repayments, or if you took out back to back loans because this shows that you really couldn't afford to take out a new one.
Look back through your emails, bank statements and credit reporter for evidence.
You'll need to write a formal complaint letter to each lender explaining how you were irresponsibly lent to and include the evidence.
You'll need to cite "unaffordable loans" and ask for a refund of the interest and charges you paid, as well as the 8 per cent Ombudsman interest on top.
Make copies of all of the evidence before sending in case anything happens to them.
Also ask for the loan to be removed from your credit record.
You can find a letter template here.
Wait up to eight weeks to hear back from them. If you're not happy with the answer, or they don't get back to you, contact the Financial Ombudsman.
Borrowers who receive a request to make payments to any other bank accounts should contact the customer services team as soon as possible.
You can do this by email to email@example.com or call 0207 183 8078.
The help line will remain open for existing customers but the firm is no longer accepting applications for new loans.
In the statement, the firms said: "The Company remains regulated by the Financial Conduct Authority who will continue to supervise the Joint Administrators’ activities throughout the administration process."
Payday lenders have come under pressure in recent years after stricter affordability checks were introduce by the Financial Conduct Authority in 2014.
The new rules banned payday lenders from charging borrowers more in fees and interest than the amount borrowed.
The financial regulator has also announced a cap on rent-to-own products following The Sun's Stop The Credit Rip Off Campaign.
There's been a huge jump in Brits taking out payday and short-term loans in recent years.
In July, PiggyBank was also temporarily banned from handing out loans over "concerns" it could be irresponsibly lending.
Meanwhile, payday lenders are targeting skint parents with loans for school uniforms — at interest rates of up to 1,333 per cent.
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