ADMINISTRATORS dealing with the affairs of a collapsed payday lender expect to start settling complaints about mis-selling soon.

DJS (UK) Limited, trading as PiggyBank, was one of the UK’s 10 biggest payday lenders and employed 57 people at Parkway House in Avenue Road, Bournemouth, as of 2018.

It provided short-term loans of up to £1,500 at 0.8 per cent interest per day – equivalent to an annual percentage rate (APR) of 1,270 percent.

It was suspended from lending for three months in 2018 when the Financial Conduct Authority raised concerns about its checks on whether customers could afford to repay their loans. It went into administration in December 2019.

Administrators believe 387,228 former customers may be entitled to make a claim for redress over mis-selling.

There were 136 claims totalling £76,926 that were not settled before the company went into administration. Another 2,470 totalling £1.4million have been upheld since then.

The latest administrators’ report, covering December 2021 to June 2022, said: “The administrators will now invite and agree claims from historic customers who have not already submitted a claim in the administration. The administrators are not able to accurately estimate the level of unsecured redress claims at this stage.”

An online tool has been set up which will be used to categorise each customer’s case as eligible for redress, ineligible or requiring manual review.

“The project continues and is anticipated to be concluded by the end of August,” the report said.

The administrators will then be able to settle claims, either by deducting compensation from people’s outstanding loan amounts, or by making a payment if the redress is greater than the outstanding loan.

The report says there will be up to £600,000 for unsecured creditors, but this will have to cover the costs of assessing the redress claims and assessing the claims of other unsecured creditors as well as any payout.

Administrators have so far received claims totalling £1.6m from unsecured trade creditors.

The administrators have been collecting repayments from borrowers of the company’s loans. The loan book totalled £24.7m when they were appointed.

They collected £502,307 in the period covered by the report, but recoveries have fallen to an average of £78,900 every four weeks, compared with £116,400 in the previous period.