Borrowers set to miss out on £144m of compensation from stricken lender

Some 60,000 customers of failed Nottingham short-term consumer lender Morses Club won’t receive a penny of compensation owed to them, it has emerged.

A report from Interpath, Morses Club’s administrator shows that those claiming compensation against “unaffordable” comes to almost £144m. These individuals will be treated as unsecured creditors, along with trade and other creditors who are owned £6.4m. Both parties are “highly unlikely” to see any of the cash owed to them.

The number may be even higher, says Interpath, as a Scheme of Arrangement agreed with those set to receive compensation, which had a deadline of November 30 last year, does not apply while Morses Club is in administration.

Last April, Morses Club launched a compensation fund of just £20m, which it said would be chared between creditors with valid claims. It appears that the company vastly underestimated the claims for compensation for loans sold between 2007 and 2022.

Angry customers have taken to social media to complain. One said: “Less than 0.9% being paid of any compensation… they have had enough money from people over the years they should pay their customers the compensation they were promised.”

Documents released by Interpath say it has kept on 182 staff at Morses Club to help with ongoing debtor collection and orderly wind down of the business. A further 100 jobs were lost.

Morses Club’s sister company, Shelby Finance, is also set to liquidated.