Lender’s future in doubt as complaints bill soars

Nottingham-based subprime lender, Morses Club, has issued a stark warning to investors this morning (July 20), saying that complaints submitted by claims management companies could cost it around £45m.

The firm said today that it was looking to pursue a Scheme of Arrangement, part of the Companies Act, which it says would “treat all customers equitably and settle eligible redress claims over a period to be defined”.

The statement added: “The directors believe that a successful scheme would provide more certainty in respect of the total liability for redress claims and help to secure the longer-term stability of the company.

The issue first came to light in February, with the firm saying it would “tighten its criteria” to ensure the quality of its lending is maintained.

However, today, Morses Club said that if the scheme is not adopted its future could be in doubt.

Details of any potential Scheme would be announced in due course, the company said, and it would be subject to the approval of the requisite majority of affected customers.

Gary Marshall, CEO of Morses Club, said: “As the UK’s leading home collected credit provider, we provide a valuable service to thousands of our customers who are unable to access mainstream credit providers and are likely to need even more support given the current economic climate. A successful Scheme of Arrangement would provide more certainty to the total liability arising from customer complaints and ensure that we can reshape the business for the future. The potential Scheme is intended to provide a fair settlement for all eligible customers, whilst securing the company’s future and enabling us to continue to provide access to credit for an underserved and growing demographic.”