Thousands of desperate borrowers are being warned they are at risk from loan sharks now that Morses Club, one of the last remaining doorstep loan providers, has folded.
Being left high and dry after the lender, along with its brands Dot Dot Loans and Shelby Finance, went into administration makes families, often with poor credit scrores, hugely exposed to illegal or exploitative practices – and never more so than over the Christmas period and New Year.
Morses’ customers, some 40,000, will still be expected to repay their loans.
However help could be available from fair, responsible lenders, urges not-for-profit financial inclusion organisation Fair4All Finance, supported by the Illegal Money Lending Team. CDFIs, as they are also known, can be found here.
While expensive when compared with loans from mainstream banks, Morses was a regulated lender, and a safe, legal route for many unable to access mainstream credit.
Lauren Peel, consumer insights director at Fair4All Finance, says: “Morses Club’s collapse comes at a particularly difficult time if you were planning to take out a loan to help during the Christmas and New Year period.
“Responsible CDFIs may be able to offer you a fair loan even if you have a less than perfect credit score. They have your best interests at heart so they won’t lend to you unless they think you can afford repayments and will make a decision that is right for you, based on your ability to repay now rather than your credit history alone.”
Fair4All Finance expects that some Morses Club employees may continue to lend to their existing contacts, with some customers being unaware that this is no longer a safe way to borrow.
This is based on what happened when Provident (another home collected credit provider) left the market in 2021. Their home collection agents were made redundant, but some continued to lend and collect from customers.
Because this was the same person who had been coming to offer them a loan or taking repayments for years, many borrowers were unaware that they had no protections any more.
Customers with outstanding loans are expected to continue making repayments.
Cath Wohlers from the England Illegal Money Lending Team warns:
“Often people don’t realise they are borrowing from a loan shark/illegal lender – they think they are borrowing from a friend or a legitimate lender.
“We see cases where people have borrowed for years from someone who used to be authorised to lend money – but has carried on lending after the authorisation has been taken away or the company has ceased trading. This means the customer is no longer protected by the strict rules around lending, and the lender is acting illegally.”
To find out more or access uphold click here.
Fair4All Finance is also concerned that people may have missed information from Morses Club’s administrators.
Having access to credit in challenging financial times is part of someone’s financial resilience and knowing the likely options can be a big relief.
Finding Finance lists simple, fair, small affordable loan providers provided by members of Responsible Finance.
Even for someone with a poor credit score, these providers will always evaluate you for a loan and, even if they can’t offer one, may be able to refer you to benefits calculators or other additional uphold.
People need to display that they can afford to make repayments – lending responsibly means that community finance lenders will only lend to people who can afford to make the repayments.
