To resolve complaints about PiggyBank loans

ADMINISTRATORS handling the affairs of a failed payday lender expect to begin resolving mis-selling complaints soon.

DJS (UK) Limited trading as PiggyBank was one of the UK’s top 10 payday lenders and in 2018 employed 57 people at Parkway House, Avenue Road, Bournemouth.

It provided short-term loans of up to £1,500 at an interest rate of 0.8 per cent per day – equivalent to an annual percentage rate (APR) of 1,270 per cent.

It was suspended from lending for three months in 2018 when the Financial Conduct Authority raised concerns about its reviews of whether customers could afford to pay back their loans. In December 2019 it went into administration.

Administrators estimate that 387,228 former customers could be eligible for mis-selling redress.

There were 136 outstanding claims totaling £76,926 before the company went bankrupt. A further 2,470 have since been confirmed, totaling £1.4million.

Administrators’ most recent report, which covers December 2021 to June 2022, states: “Administrators will now invite and approve claims from historical customers who have not yet submitted a claim to administration. Administrators are not in a position to accurately estimate the amount of unsecured recourse claims at this time.”

An online tool has been set up that is used to categorize each client’s case as eligible, non-eligible, or requiring manual review.

“The project is ongoing and is expected to be completed by the end of August,” the report said.

Administrators can then settle claims by either deducting compensation from individuals’ outstanding credit balances, or making a payment if the compensation is greater than the outstanding credit.

The report says there will be up to £600,000 for unsecured creditors, but this must cover the costs of assessing redress claims and assessing the claims of other unsecured creditors and any payouts.

Administrators have so far received claims totaling £1.6m from unsecured commercial creditors.

Administrators collected repayments from borrowers of corporate loans. The loan book totaled £24.7 million at her appointment.

They collected £502,307 in the period covered by the report but recoveries have fallen to an average of £78,900 every four weeks, compared with £116,400 in the previous period.

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