Discretionary Commission Arrangements - Compaints and refunds
Morses Club PLC, a renowned name in the UK's non-standard consumer finance market, has a storied history that spans over 130 years. The company has distinguished itself by providing flexible, affordable, and convenient access to credit for a broad customer base. However, despite its longstanding presence and operational success, Morses Club faced significant challenges that led to its administration in November 2023.
Morses Club PLC operated within a niche of the financial services sector known as "home collected credit," distinguishing itself as the second largest lender in this market within the UK. The company's business model was centered around offering a range of loan products to customers through an extensive network of agents. This model catered primarily to repeat customers, with Morses Club boasting a consistently high customer satisfaction score of 95% or above. The company's approach to credit was deeply rooted in customer relationships, aiming to provide credit solutions that met the varied needs of its clientele with flexibility (AnnualReports).
The company's operations were divided into two main divisions: home collected credit and digital lending. These divisions encompassed the Morses Club and Dot Dot brands, respectively, offering small, short-term loans that ranged up to £5,000 for online lending customers. With a clientele exceeding 95,000 customers in the UK, the company strived to uphold a customer-centric ethos, emphasizing the fair treatment of customers as central to its operations (Morses Club - Home).
Despite its long history and customer-centric approach, Morses Club PLC encountered severe financial difficulties that ultimately led to its administration. The company faced sustained financial pressure, exacerbated by a significant number of customer redress claims in recent years. These challenges were compounded by the company's inability to refinance its existing debt facilities, despite attempts to restructure the business. This included the implementation of a Scheme of Arrangement in May 2023, aimed at addressing the redress claims. However, these efforts were insufficient to navigate the financial turmoil, leading to the directors' decision to appoint administrators (Morses Club - Home).
The administration of Morses Club marks a significant turn in the company's history, highlighting the volatile nature of the non-standard credit market and the challenges of sustaining operations amid financial pressures and regulatory scrutiny. The story of Morses Club serves as a cautionary tale about the complexities of the financial services industry, particularly for companies specializing in non-standard credit offerings.