What If The Lender Has Gone Into Administration?
When a lender goes into administration without a successor, the standard route for unaffordable lending complaints is closed. The Financial Ombudsman cannot help, because the lender no longer exists as a regulated entity in the ordinary sense. Recovery — if any — runs through the relevant administration scheme or scheme of arrangement, and historic experience is that consumer claimants typically receive a small fraction of what their underlying redress entitlement would have been. This page sets out the position for the major collapses and what your options are.
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Why FOS can’t help
FOS’s jurisdiction depends on the lender being subject to its rules — generally, FCA-authorised. Once a lender enters administration, day-to-day operational complaint handling stops, and once the administration concludes (with the company dissolved or its FCA permissions surrendered), there is no entity for FOS to require to pay redress. Open complaints with FOS at the point of collapse are typically returned or paused.
A few exceptions exist where a lender continues operating during administration with FCA permissions intact and continues to handle complaints — but these are unusual, and even then the practical recovery is constrained by the administration’s available funds.
Schemes of Arrangement vs administration
A Scheme of Arrangement is a court-approved compromise between a company and its creditors, used by some failing consumer credit lenders to cap their redress liability. Administration is a formal insolvency process for a company that cannot pay its debts. Either way, claimants become unsecured creditors with claims that are paid (if at all) at a tiny fraction of face value.
Schemes of Arrangement that have been used include:
- Provident (CCD) Scheme — closed for new claims in 2021, payouts at around 4-5p in the £.
- Amigo Scheme — closed for new claims in November 2022.
- Morses Club Scheme — closed for new claims in November 2023, then administration followed when the scheme failed.
The major collapsed lenders
Payday and short-term
- Wonga — administration August 2018. Claim window long closed; final distribution was 4.3p in the £.
- QuickQuid (CashEuroNet UK) — closed October 2019. Administration claim window closed.
- MyJar — administration December 2020.
- Peachy — administration March 2020.
- Wageday Advance — administration February 2019.
- Safetynet Credit — administration January 2023.
- Uncle Buck — administration.
- Drafty — closed 2022.
- Sunny / Provident’s payday brands — covered by the Provident Scheme.
Doorstep
- Provident Personal Credit (CCD division) — Scheme of Arrangement closed 2021/2022.
- Morses Club — administration November 2023, after Scheme failed. Sister company Shelby Finance (Dot Dot Loans) liquidated.
Guarantor
- Amigo — Scheme closed for new claims November 2022. The company stopped lending and is in wind-down.
- TFS Loans / TrustTwo — administration 2024.
- Buddy Loans — ceased trading.
Other
- Studio Retail Group — administration February 2022. Catalogue brand Studio Pay no longer trading.
- Fund Ourselves — administration July 2025.
What you can still do
Check whether the claim window is still open
Most administration claim windows have closed. Where one is still open — typically a recently failed lender — the administrator will publish the deadline and the process. You normally need to register a claim with the administrator before the deadline. After the window closes, no further claims can be made.
Check whether your loan was sold to a third party
When lenders fail, their loan books are often sold to debt collectors. The most common buyer for collapsed payday and short-term lenders has been Lantern Debt Recovery Services, but others (Cabot, Lowell, Intrum, Idem) also feature. The third party is bound by the original lending terms but doesn’t take on the original lender’s redress obligations beyond the wind-down’s arrangements.
Where the original lending was found unaffordable as part of the wind-down (some administrators apply a methodology to assess affordability before selling the loans), the third party should be aware of this. If you think the lending was unaffordable and you are still being pursued by a third party, you can raise the affordability point with them and request that they review the position.
Check whether the loan was written off
Some collapsed lenders’ administrators have written off outstanding loans rather than selling them — particularly small balances or loans where affordability was clearly questionable. If your loan was written off, you should have received a notification, and your credit file should show a zero balance or “partially satisfied” marker.
Consider court — for substantial claims
For a borrower with a substantial potential claim and where the lender has collapsed without a payable scheme, court action under Section 140A of the Consumer Credit Act 1974 is theoretically available — but practically constrained by the lender having no money. A claim against a successor entity that bought specific liabilities, or against directors personally where misconduct can be shown, is sometimes pursued, but these routes are technical and require specialist legal advice.
What about FSCS?
The Financial Services Compensation Scheme covers eligible deposits and certain investment and insurance products, but does not cover unaffordable lending redress. A failed consumer credit lender’s redress liability is not protected by FSCS. The FCA has confirmed that this position will not change for BNPL when it comes under regulation in July 2026 either.
Lessons from the recent collapses
The pattern across the collapsed lenders has been broadly similar: complaint volumes rose to a level that exceeded the lender’s reserves, redress provisions were exhausted, and the company entered insolvency. From a consumer’s perspective, the practical takeaways are:
- Bringing a complaint while the lender is solvent gives the best prospects of full redress.
- Schemes of Arrangement typically pay a small fraction of underlying entitlement — often 4-5p in the £ historically.
- Administrations are usually worse — sometimes nothing is paid out beyond the cost of running the wind-down.
- Loans sold to third parties remain enforceable, although affordability can sometimes be raised to negotiate down.
Related guides
- Which types of credit can be claimed as unaffordable?
- How the Financial Ombudsman handles unaffordable lending complaints
- Section 140A and the unfair relationship test
- What if you still owe the lender money?
- Do I have an unaffordable lending claim?
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