Failed lenders write off customer debts

Over the past few days, customers of a number of failed lenders have received emails from the administrator telling them their debts are to be written off.

Following the collapse of SafetyNet Credit, Tappily and Morses Club, some customers will no longer have to repay their debts.

SafetyNet/Tappily

Find out what will happen to your debt if you're a SafetyNet/Tappily customer.

Will my SafetyNet/Tappily debt be written off?

Yes! All current SafetyNet and Tappily balances are being written off. This means:

• scheduled payments won’t be taken
• standing orders will bounce (cancel yours if you have one)

What if I want to make an affordability complaint?

If you believe the amount SafetyNet or Tappily lent to you was unaffordable, you can make a complaint. But you don’t have long. The administrators have announced they are only accepting new complaints up until 15 April. Email [email protected] as soon as possible using the subject ‘Affordability complaint’. Let them know how long you were borrowing and how it was a struggle to repay.

If you won an affordability complaint against SafetyNet or Tappily, you could be owed a refund. The administrators have said it’s expected to be small - in the region of 3 to 4 pence for every pound. This means for every £100 owed, you can expect to get around £3-4.

How does this affect my credit record?

This will depend on whether the debt has defaulted. If it has, it’ll stop showing six years after the date of the default.

If it hasn’t, the debt will drop from your credit record six years from the settlement date (9 April).

Credit record error

If there’s something that doesn’t look right on your credit report for SafetyNet or Tappily loans you can either:

email [email protected] and ask them to correct your credit record. It might be difficult to get the administrators to do anything, but it’s worth a shot

wait 6-12 months, when the administrators won’t be replying to any queries, and ask the credit reference agencies to suppress the incorrect record so it isn’t visible to other lenders

Important information

You won’t be able to access your SafetyNet dashboard from 9 April, so if you want a record of your past payments, download them quickly.

If you were paying CRS, you can stop.

If you’re in a debt management plan (DMP), ask the company managing it to stop paying and remove the debt.

Your debt won’t be sold to a debt collector

Morses Club

The doorstop lender Morses Club went into administration last November.

While some of the outstanding debts have been written off, some were also sold to the debt collector Lantern.

How do I know if my Morses debt was sold to Lantern?

The administrators legally transferred part of the Morses Club book of outstanding customer loans to Lantern on 8 March.

If your loan was sold to Lantern, they should have been in touch to let you know and explain how to start making payments to them.

What about other Morses loans?

It’s good news! Loans that weren’t sold to Lantern have fully been written off as of 7 March.

You should have had an email or letter telling you this.

How will this affect my credit record?

An outstanding balance with Morses Club on your credit record will now show as ‘partially satisfied’.

This will be visible to other lenders but won’t affect your credit score.

If you defaulted on the debt, the default will stop showing on your credit file six years after the date of the default.

If you didn't, the debt will drop from your credit record six years from the settlement date.

Credit record error

If there’s something that doesn’t look right on your credit report for your Morses Club loan you need to get in touch with the Credit Reference Agencies to amend this.

Will I get a refund?

If you’ve made an affordability complaint and are owed money, the administrators have said there might be a very small amount of money to be given out from a pot Morses Club had when it first set up the failed Early Termination Fund. They are currently seeking court guidance on how to distribute this.

But they’ve also said, "any distribution is expected to be less than 0.9p to pounds. So, if you’re owed £1,000, you won’t get more than £9."

If you've made any other complaints and have yet to get a response, the administrators will be in charge of handling them. 

Fraud alert

If you’re a customer of one of these failed lenders, stay alert as fraudsters may try to take advantage of you in this situation. Find out how to spot scammers.

Debt help 

If you’re struggling with debt and don’t know what to do about it, we can help. All our debt advice is free and impartial. Some debt solutions are also free, for others, there’s a fee.