Lender TFS Loans collapsed into administration today but customers are still required to make their repayments and existing complaints against the lender are ongoing
(Image: Getty Images/iStockphoto)
Expensive lender TFS Loans has slumped into administration following claims of “bad loans”.
The company is known as a guarantor, which means a family member or friend will have to make the repayments if you can’t.
These types of lending companies often charge usurious interest rates.
TFS would lend between £3,000 and £15,000 with terms of between one and five years at rates between 30% and 70% and a representative APR of 39.9%.
The company ceased lending entirely in February 2021 and became insolvent in January 2022.
Opus Restructuring was hired as administrator this week and said “the main causes of the company’s failure stem from unaffordable lending”.
Other companies in the industry have gone bust in recent years, including payday lender Wonga, while Provident has shut down its doorstep lending business.
Most major lenders no longer offer guaranteed loans, including Amigo, George Banco, TrustTwo and UKCredit.
Opus said: “It was necessary to place TFS in administration to protect the business and the interests of creditors.
“We would like to emphasize to our customers that this does not change the terms of the loans they have taken out with TFS Loans Limited.
Are you a TFS Loans customer with an ongoing complaint? Let us know: [email protected]
“It is important that all customers continue to be required to continue repaying their loans according to the terms of their agreements as this continues to have a positive impact on their creditworthiness.”
Guaranteed loans recently overtook PPI as the most complained-of financial product, according to figures from the Financial Ombudsman.
Allister Manson, one of the joint administrators, said: “Unfortunately, the pandemic has led to a drop in lending during the lockdown, which has had a negative impact on cash flow for TFS.
“It was necessary to place TFS under receivership to protect the business and the interests of creditors.
“We would like to stress to our customers that this does not alter the terms of any loans they have taken out with TFS Loans Limited.”
I am a TFS Loans client – what happens next?
Administrator Opus Restructuring has said customers should continue to pay off their loans. However, TFS is no longer able to issue new loans.
If you are having difficulty making your repayments you should contact 01268 740 755 on the TFS Loans website for assistance.
Administrators say they are in the process of reviewing how they will respond to ongoing customer complaints against TFS loans.
But in previous situations where a lending company went bust, applicants did not receive the full amount owed to them.
For example, Wonga customers only received 4p for every £1 paid.
Sara Williams, who runs the debt camel blog, notes that this could be a lengthy process for TFS Loans clients.
“In a month or two, Administrators Allister Manson and Trevor Binyon of Opus Restructuring LLP will be releasing their proposals for administration,” she said.
“Your job is to sell a company’s assets and divide the available cash among the company’s creditors. This distribution can take a long time – often more than a year.”
If you are waiting for compensation payment from TFS, you should contact administrator for updates.
Customers who feel they have been missold but have not filed a complaint can still do so after a business has gone bankrupt.
Administrators have advised you to email [email protected]
“Anyone who is owed money by a company that is going bankrupt can make a claim with the administrators,” Ms. Williams said.
“In this case, this includes past and present TFS customers, borrowers and guarantors. They could all be creditors because they may have a claim against TFS for unaffordable lending.”
“Admins will likely set up a page where customers can file a complaint.”