14 June 2022
TFS Loans Limited (TFS) entered into administration on 08 February 2022 with Allister Manson and Trevor Binyon of Opus Restructuring LLP appointed as Joint Administrators. Since the appointment, the Joint Administrators, acting as agents of TFS but without personal liability, have ensured that TFS has continued to maintain collections activity for repayment of outstanding loans from both borrowers and guarantors for borrowers.
TFS offered guarantor loans to customers who typically struggled to obtain credit. TFS ceased offering guarantor loans from March 2020.
The Financial Conduct Authority (FCA) conducted an investigation prior to TFS’ administration into the affordability checks undertaken by TFS in the period 02 November 2015 and 10 April 2018 (the “Relevant Period”) in relation to guarantors of loans written by TFS in the Relevant Period. The FCA concluded that there was evidence of deficient affordability checks having been undertaken by TFS for guarantors of loans in the Relevant Period.
The FCA has fined TFS in the sum of £811,900. This is an unsecured claim against TFS which the FCA have agreed to rank behind all valid provable unsecured creditor claims so as not to prejudice consumers in relation to distributions, if any, which may fall due to be made to them in the future.
The Joint Administrators are working with the FCA to agree a redress programme for this group of guarantors, and others, to ensure that those who were incorrectly assessed at the time of the loan are identified and assisted in making a claim as unsecured creditors of TFS for redress properly due as a result of the deficient affordability assessment undertaken by TFS at the time of the loan. The timing of the agreement to a redress programme and its implementation is not yet determined.
Whilst the initial redress programme work with the FCA continues, there remains uncertainty as to whether there will be sufficient realisations made to enable a distribution to be achieved by TFS to unsecured creditors. If there are sufficient funds to make a distribution to unsecured creditors, this will be communicated to all such creditors in the future.
It is important that all borrowers or guarantors of a borrower with an outstanding loan should continue to make repayments in accordance with the terms of the loan agreement. The Joint Administrators will contact the relevant parties if they are eligible for redress and will liaise with them regarding the repayment of any sums paid to TFS since the commencement of the administration and the submission of any unsecured claim plus the repair of credit history and release of guarantors.
Loans are subject to status and affordability. *Consolidating debts may increase the term and the total amount payable.
Before entering into any credit agreement please make sure you can afford the monthly repayments, we recommend that you seek independent advice if you are unsure of any of the terms of our agreement. There may be other taxes or costs, not paid through us or charged by us, that you have to pay in connection with the agreement.
Late repayments can cause you serious money problems. For help go to www.moneyadviceservice.org.uk
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