Morses Club PLC (AIM:MCL) shares jumped 3.1% to 5.2p after providing an update on its potential scheme of arrangement.
On 20 July, the company’s board announced its decision to pursue the potential use of a scheme of arrangement to deal with customer redress claims for unaffordable lending.
The loan provider said it has now taken steps to pause the processing of all new redress claims with immediate effect, which is expected to develop the detail regarding a potential scheme to ensure fair treatment of all customers, it said in a statement.
Gary Marshall, Morses chief executive, said: "The company's decision to pause the processing of new redress claims with immediate effect represents a significant step in ensuring that we can successfully progress a potential scheme of arrangement.
“This helps to provide greater certainty with regard to the total liability arising from customer complaints and sets the business on a more secure footing for the future.”
The directors of Morses believe a successful scheme would likely provide more certainty in respect of the total liability for redress claims and help secure longer-term stability.
It appointed an independent chairperson to set up a customer committee to represent eligible customers and aid the development of detail of any prospective scheme.
“Our deep commitment to providing customers with access to credit in a growing market remains unchanged," Marshall added.