Customer Redress Scheme and FAQs
Uncle Buck Finance LLP (/Uncle Buck’) – In Administration
Following extensive investigations into the historical lending practices of Uncle Buck, the Joint Administrators have reached a conclusion upon a set of criteria to be used in assessing whether a customer qualifies for Redress. Following the application of this criteria, which has been applied to the entire customer base of Uncle Buck, the Joint Administrators‘ have been able to establish those customers that qualify for Redress and the value of each customers claim.
Claims for customer redress will essentially fall into 3 categories. The creation of the various categories does not affect a customers eligibility for Redress, which has been considered across the whole customer population both in respect of both live and historic customers, Unfortunately it does however impact on the availability and priority of payment of funds (as governed by insolvency legislation) to meet any Redress that may be due and unfortunately the vast majority of customers will not receive any payment from the Administration.
Category 1 – Customers who have made payments to Uncle Buck after 27 March 2020.
- If you still have or had a current loan with Uncle Buck after 27 March 2020 and have made repayments towards your loan since this date, you may be entitled to Redress. This may result in a reduction in the balance of your loan, a full or partial refund of the payments you have made since 27 March 2020 or a combination of both. You will shortly receive communication by email from the Joint Administrators directly concerning this.
- All customers qualifying for a reduction in the balance of their loan will be contacted directly advising of this. This communication will detail the amount of their loan prior to any reduction, the amount it has been reduced and the revised balance outstanding.
Category 2 – Customers with outstanding loans, but who have not made any payments after 27 March 2020
- Whilst you have not made any payments towards settlement of your loan after the appointment of the Joint Administrators’ on 27 March 2020, you may still be entitled to Redress.
- Such Redress may take the form of a reduction in the balance of your loan the resulting effect being that your loan may be cleared in full or the outstanding amount reduced. The Joint Administrators’ have already automatically updated qualifying customers’ accounts and you need take no action in this regard. All customers qualifying for a reduction in the balance of their loan will be contacted directly advising of this. This communication will detail the amount of their loan prior to any reduction, the amount it has been reduced and the revised balance outstanding.
- Where after Redress has been applied there remains an outstanding balance on your account, it is the Administrators duty to continue to collect this.
- Any Redress that may be still due to customers after loan balances have been cleared will represent an unsecured claim in the Administration proceedings. Regrettably no payments will be made to Category 2 customers due to the lack of funds within the Administration. I would refer you to the Redress Scheme FAQs below for further information.
Category 3 – Former customers of Uncle Buck who had repaid their loans in full prior to the appointment of the Joint Administrators’ on 27 March 2020
- If you have been a customer of Uncle Buck at any time and had repaid your loan prior to Administration, whilst you may still be eligible and qualify for Redress, there will unfortunately be insufficient funds available to enable any payment towards your claim from the Administration proceedings.
- In these circumstances, to assist us in reducing the costs of the Administration, (there are in excess of 100,000 customers fall into Category 3), we would urge you to review this update in full prior to contacting us as unfortunately there will be no dividend payment to Category 3 customers from the Administration.
Are you awaiting a Response to a Complaint You Have Already Made?
In respect of those customers who have already submitted complaints prior to or after our appointment, you will be notified by the Joint Administrators’ of the outcome. However, please note the potential outcomes of your claim depending on whether you fall into Category 1, 2 or 3 above.
Credit Rating Agency Reporting
All customer credit records will be updated to reflect the outcome of the Redress exercise. Further information on this can be found in the Redress Scheme FAQs update below.
Redress Scheme FAQs
To be eligible for Redress, the customer must meet one or more of the following criteria at time of loan application.
- Had less than £100 disposable income
- Had more than three payday loans at the time of application of the loan
- Had experienced previous payment difficulties with Uncle Buck
- Had a loan granted within 90 days of any payment plan with Uncle Buck
- Where it is considered that a customer’s income had not been adequately verified
The customer needs to meet only one of the above five qualification criteria’s.
If any of the following scenarios are met, the individual will be ineligible for any redress;
- Not meeting one or more the five Redress criteria.
- If the FOS has already provided a final decision regarding redress on a loan with Uncle Buck and settlement had been paid.
- Redress has already been paid on a loan to the individual by Uncle Buck through a previous complaint.
Please note that this does not preclude customers being eligible to claim for Redress for loans covered by the above.
Based on the current financial situation of Uncle Buck and the lack of funds within the Administration, the above approach has been deemed the fairest and most cost-effective strategy. The Joint Administrators’ consider that the Redress criteria listed above will determine whether, at the time the loan was advanced, granting short term lending was potentially unsuitable in terms of affordability and appropriateness.
For customers eligible for redress, we have used the industry standard principles;
- A refund of all fees and charges, including interest paid.
- An 8% simple interest from the dates the payments were made
Certain customers who have made payments after 27 March 2020 will shortly receive an email (to the email address on file at Uncle Buck) from the Joint Administrators’. Upon receipt of this email if you wish to submit a claim for Redress on the grounds that any loan(s) provided to you by Uncle Buck were unaffordable and consider that you have been the subject of irresponsible lending, it is important that you respond to the Joint Administrators’ email. A member of the Joint Administrators’ team will then contact you to advise whether you qualify for Redress and of any potential award due to you.
If you consider that you are a Category 1 customer and have not received an email from us, please contact us at UBredress@harrisons.uk.com and we will investigate the matter further.
Please note that should you qualify for Redress you will receive an email from UBredress@harrisons.uk.com notifying you of any reduction in the outstanding balance on your account. No further action is required by you as any adjustment will be automatically be made to your account. Where any award is greater than the balance outstanding on your account, regrettably due to a lack of funds in the Administration, there is no prospect of a payment being made to you. Further information advising for the reasons for this can be found in the Redress FAQs below.
If you consider that you are a Category 2 customer and have not received an email from us, please contact us at UBredress@harrisons.uk.com and we will investigate the matter further.
This update regrettably informs you that Category 3 customers who had repaid their loans prior to the appointment of the Joint Administrators’ have no prospect of receiving any payment from the Administration whether they qualify for Redress or not. In these circumstances, to assist us in reducing the costs of the Administration, (there are in excess of 100,000 customers fall into category 3), we would urge you to review this update in full prior to contacting us as unfortunately there will be no dividend payment to Category 3 customers from the Administration.
– If you are a category 1 or 2 customer and have changed your email address, we would urge you to contact the Joint Administrators’ at UBredress@harrisons.uk.com advising of your new email address so we can update our records. Upon receipt a member of our team will contact you to advise you if you qualify for Redress and provide you with details of any award that has been made.
If you do not or cannot get access to an email address, please call us on [phone number] and we will communicate with you by phone and post.
Category 1 customers who submit a claim and qualify for Redress and have made payments to the Joint Administrators’ since 27 March 2020 are, in accordance with insolvency legislation, entitled to a refund of monies paid post Administration to the extent of any amount of Redress payable to them and in a maximum sum equivalent to the total payments made since 27 March 2020. Such a refund of payments made by category 1 customers post Administration should not be confused with the payment of a dividend on claims from the Administration. As with category 2 and 3 customers, any category 1 customers entitled to Redress over and above the refund of any payments they have made since Administration will be treated exactly the same as category 2 and 3 customers and equally will not receive any payment from the Administration.
In all insolvencies in England and Wales there is an order of priority of payments that must be adhered to by the office holders, in this instance the Joint Administrators. In this particular Administration, there is what is known as a ‘floating charge holder’ who ranks in priority to the customers and other unsecured creditors of Uncle Buck other than to the extent of the ‘Prescribed Part’, which is described below. Essentially this means that funds available for distribution are payable to the floating chargeholder in priority to the customers and other unsecured creditors. The payment to the floating charge holder is subject to the Prescribed Part that amounts to approximately 20% of the funds available for distribution to the floating chargeholder, but subject to a maximum amount in this particular Administration of £600,000.
A floating chargeholder in simple terms is a person or corporate that loans money to a company or LLP and on the basis that the funds advanced are subject to a charge over the assets of the company or LLP enabling it to take priority in terms of repayment in the event of the failure and subsequent insolvency of the business. In this Administration, the floating charge holder will suffer a substantial shortfall in the monies due to it.
The prescribed part is a sum of monies ringfenced for customers and other unsecured creditors from the monies available to repay the floating chargeholder This amounts to approximately 20% of the fund available for distribution to the chargeholder. The prescribed part for insolvencies occurring prior to April 2020 was subject to a maximum amount of £600,000.
The Prescribed Part is available to cover the costs associated with dealing with the claims of customers and unsecured creditors, any resulting balance being paid by way of dividend to customers and other unsecured creditors.
In this particular Administration, the costs of dealing with customers and other unsecured creditors has resulted in there being no prospect of a dividend being available to customers or the general body of unsecured creditors.
The simple answer to this is yes. The credit rating agencies will be notified (usually by 6th of the month) in respect of all customers who qualified for Redress irrespective of what category they fall in to as follows.
If you are a customer who had repaid their loan prior to Administration, or a customer where following the application of any Redress, this results in your loan balance being cleared, the credit rating agencies will be notified to remove any record of the loan.
For customers where there is still an outstanding balance on your loan after Redress has been applied, the Joint Administrators’ will report the reduced balance of the loan to the credit rating agencies.
For customers who do NOT qualify for Redress there will be no change in status in respect of your loan at the credit rating agencies and records relating to your loans will NOT be removed.
It is anticipated that all matters relating to the reporting of the Redress Scheme to the Credit Rating Agencies will be completed by the February 2021 reporting date.