Are you a Money Shop customer? As the lender goes bust we ask what it means for borrowers and those who want to get their pawned items back
Pawnbrokers and travel money and payday loan provider The Money Shop has ceased trading, according to a letter seen exclusively today by This is Money.
Instant Cash Loans Limited told its employees it plans to close or sell of all its UK shops following an ‘unprecedented number of customer complaints’, driven by claims management companies.
Nearly 430 jobs are likely to be affected as a result.
A letter given to This is Money revealed The Money Shop is ceasing trading
Those who have pawned off items and want to get them back may feel anxious following the news, but according to the company’s website you can still do so.
It says that all pledged, or pawned, items are held ‘securely at our central location’, which means they are unaffected even if your local The Money Shop has closed down.
You can see which shops are still open for now on the company’s website.
While you will probably have to pay more than what you pawned an item for, you can arrange a reclaim by calling 0121 726 1154 Monday to Friday between 9am and 5pm.
ICL says: ‘Once you have made the agreed redemption payment, we will write to you to confirm receipt and request you to surrender your original “Fixed Sum loan Agreement and Pawn Receipt” to us within 30 days, using a pre-paid envelope supplied.
‘Subject to the receipt of the Agreement, we will post your pledge via Special Delivery Signed For to your home address.’
In order to make a full or part payment, you will need to either make a debit card payment over the phone, or make a bank transfer to ICL’s NatWest account, during the length of your Pawnbroking Agreement.
Be warned that if you do not call ICL within 14 days after the expiry date of your contract, your items will be sold by ICL.
Do I still have to pay back my loan?
The Money Shop also offered short-term, high-cost loans, which brought it under scrutiny after the Financial Conduct Authority made changes that capped the cost of payday loans.
In 2015, it was forced to pay out £15million in compensation after the watchdog found that customers may have suffered as a result of the firm’s affordability checks, debt collection practices and system errors.
When Wonga went into administration borrowers still had to make their loan repayments
It offered between £100 and £2,000 paid back over a period of three to 12 months, loans which came with a 447 per cent APR. This means if you borrowed £300 for six months you’d pay back £450.18.
The Money Shop in May sold 18 of its shops to Teeside Pawnbrokers Ramsdens, but none of its loan book was sold in the process – with Ramsdens telling This is Money that side of the business had ‘categorically nothing to do with us’.
While The Money Shop stopped providing loans in August 2018, some borrowers may still have outstanding payments left to make. Often when one of these providers cease trading the first question asked by borrowers is whether they still have to make their loan repayments.
The firm has not commented on This is Money’s story yet to give any guidance, but just because it has ceased trading does not mean you can – or should – stop making your loan repayments.
When Wonga went bust in August last year borrowers still had to make payments on outstanding loans, and it is almost certain the same will apply here.
Hopefully The Money Shop will contact those concerned.