Register with us for free to get unlimited news, dedicated newsletters, and access to 5 exclusive Premium articles designed to help you stay in the know.
Join the UK's leading credit and lending community in less than 60 seconds.
Opus Restructuring’s Allister Manson and Trevor Binyon have been appointed joint administrators of TFS Loans now the firm has entered into administration.
Senior Journalist, covering the Credit Strategy and Turnaround, Restructuring & Insolvency News brands.
The guarantor lender says it will continue to operate, although it won’t be making any new loans. It will also be working closely with regulator the Financial Conduct Authority (FCA) to ensure that customers are treated fairly and in line with FCA guidance while it continues collecting outstanding loan balances.
The firm had stopped making guarantor loans in March 2020 and instead concentrated its activities on managing collections in its existing loan book.
According to its full accounts update published in December last year, this was difficult during the second half of 2020 following an initial three-month payment deferral. This was followed by a subsequent extension of an additional three months to those borrowers who requested a payment holiday.
During that year, the company also encountered an increased level of affordability claims. And, while a significant number of these claims were - according to the firm - “frivolous”, it had to work through each case and the full cost of managing this additional workload and compensating the successful application could not at the time yet be fully determined.
TFS Loans’ administrators Opus said “the main causes of the failure of the business are rooted in unaffordable lending”.
As part of its work, the administrators are in the process of devising a methodology for dealing with customers who may have suffered a loss as a result of the firm’s lending practices.
Once this has been implemented, they intend to utilise this for dealing with customers who may have suffered a loss.
Get the latest industry news