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- Short Term loans lender MMP Financial Limited goes into administration
- MMP Financial’s payday loans lenders Swift Sterling and My Money Partner halt lending
- Several payday lenders have collapsed in recent weeks as FCA increases regulatory scrutiny on the affordability of loans
In past months some payday loan lenders have gone bust as they face growing customer claims and complaints. The latest short term loan lenders to go bust are Swift Sterling and My Money partner. The two firms have gone into administration days after PiggyBank also went into administration, leaving over 45,000 customers in uncertainty.
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Payday loans lenders facing increased regulatory scrutiny
Payday loan lenders have been facing a regulatory crackdown from the FCA regarding their affordability checks and compliance. The lenders face accusations of misselling customers’ expensive loans that they could not afford to pay. Following regulatory scrutiny from the FCA, the firms have found themselves staring at numerous compensation claims.
MMP Financial Limited becomes the latest firm that the FCA has put under administration. The company owns payday loans lenders Swift Sterling and My Money Partner. The FCA has appointed Grant Thornton UK LLP as the administrator of MMP Financial Limited.
Swift Sterling and My Money Partner stop all lending activity
Following the development, the two short term loan lenders have halted all lending activity. However, a statement from the firm urges customers to continue repaying their outstanding loans. It is subject to the original terms agreed on the loans. Equally, the statement indicated that customers having complaints could continue filing them with the company in administration.
The administrator will assess the complaints about consideration as part of the creditors of the estate. If the assessed complaints are valid, then the customers will be unsecured creditors of the estate. However, this means that they may not receive much compensation as they would have if the company continued trading.
Details of the collapse of MMP Financial are still unclear, and the administration indicates that the process could be lengthy. Interestingly the FCA and the administrators will work together to help affected borrowers.
Wagestream quote “Now we’re getting ready to dance on the grave of the entire industry.”
Some see the collapse of payday loan lenders as a good thing because of their high rates. Peter Briffett, the CEO of Wagestream, indicated that losing two payday lenders in a week is a cause for celebration. He added that short term lenders are collapsing like dominoes after like three of them went bust in a week.
Briffett indicated that the lenders had bled consumers dry for years, and now consumers have turned against them. He added that borrowers have realized there are other alternatives than the high-interest loans that payday lenders offer. Usually, the payday loans lenders exploit consumers more during the holiday season. Briffett indicated that it is, therefore, a great thing to see borrowers fighting back.
Several payday loan lenders such as QuickQuid, The Money Shop, and PiggyBank have gone bust in recent weeks. Last year Wonga UK’s largest payday lender went bust following a series of customer complaints.
Rebecca White is chief editor at CreditRaters.com. Rebecca has an extensive amount of knowledge on financial subjects including short-term loans & debt consolidation in the UK and USA. Rebecca has wrote for many publishers such as Debt Secret, My Money, VL and more.