Two More Payday Loan Companies Enter Administration
DJS (UK) Limited who traded as PiggyBank and MMP Financial Limited who operated the My Money Partner and Swift Sterling brands have both gone into administration.
These are the latest in a long line of casualties in the high cost short term (HCST) sector, which also has seen the collapse of household names including Wonga, The Money Shop and QuickQuid within the last 18 months.
PiggyBank, based in Bournemouth, was amongst the UK’s 10 biggest payday lenders with an estimated 45,000 customers on its books. Although its latest accounts, for the year ending July 2018, reported strong growth in both turnover and pre-tax profit there were warning signs of trouble ahead.
The company was temporarily banned from new lending between July and September this year due to concerns from its regulator, the Financial Conduct Authority (FCA), regarding the robustness of its affordability assessments for new customers.
Shane Biddlecombe and Gordon Johnston of HJS Recovery in Southampton have been appointed joint administrators. An official statement said:
“It is anticipated that the orderly wind down of the company’s business may, if applicable, include a sale of the assets of the company. The joint administrators will also commence work to identify all creditors of the company in accordance with their statutory duties and obligations.”
Chris Laverty, Trevor OSullivan and Helen Dale of Grant Thornton UK LLP, who have been appointed joint administrators of MMP Financial Limited, say they will be conducting an orderly wind down of the business, sale of the assets and will start the process of identifying all creditors, in accordance with their statutory obligations.
Statements placed on all three websites advise customers to continue to making loan repayments in the normal way, as they remain subject to the terms agreed.
They further advise that any complaints should be raised with the companies in administration; however valid claims will now be treated as an unsecured creditor claim, meaning the likelihood of getting the full amount awarded in a claim is significantly reduced.