How much compensation is owed?In terms of the amount that is owed to customers who were sold a payday loan which did not meet lending standards set out by the FCA, it is estimated to be around £223 million in total. However, it has only been recently announced by the accounting firm KPMG that customer will not receive the full amount of compensation these customers are owed, nor will they receive this payment in the near future.
How can I claim compensation?Do you believe you are owed compensation by one of these two now-defunct payday lending providers? KPMG said that its currently assessing every loan in order to see if CTL had met standards of responsible lending, sustainability and affordability when it offered the loan to customers. If after consideration it is considered that these were not met, then it will be viewed as an ‘inappropriate loan’ and you are due to a compensation payout.
- You will be contacted by email by the administrators if you have been identified as having been mis-sold a loan. However, a small number of payday loan customers will be contacted by Shelby Finance Limited, where some customers loans have been moved on to.
- If you aren’t contacted but believe you are due to a compensation payout, you can request a ‘proof of debt’ form from the administrators to take further steps about a possible claim.
- If you have changed contact details since taking out the loan, contact the administrators.
- If you have already made a claim before the firms went into administration, KPMG will be in contact with you
How much will I receive in compensation?As we have stated, KPMG has warned customers that they are unlikely to receive a full payout. Instead, the administrators say the estimated amount will be the total value of interest and charges paid per loan taken out, as well as 8% interest. However, if the financial ombudsman or CTL has already specified you are owed more compensation than this amount from KPMG, this is the amount you are due. But in practice, there isn’t enough money available to receive a full payout, due to creditor liabilities.
How will I receive compensation?The way in which you receive your payout will depend on the status of your loan:
- If you already have an outstanding balance with CTL, the amount you receive will be subtracted from the amount owed on the account
- If you do not have an outstanding balance with CTL, you will receive a payment after the administration process, however, exact amounts are yet to be decided