Customers with money held by ePayments Systems Limited face a new stage in the long-running closure of the e-money firm after it entered special administration on 15 October. The process does not reopen the business or give customers immediate access to accounts. Its immediate purpose is to establish the position of customer funds and to organise their return where possible.
Mark Boast and Allister Manson of Opus Restructuring LLP have been appointed as joint special administrators. ePayments Systems remains authorised to issue e-money under the Electronic Money Regulations 2011, and the Financial Conduct Authority has said it will engage with the administrators while seeking the best outcome for customers. That continuing authorisation should not be read as a promise about the amount or speed of any return.
What has changed
The firm stopped all customer trading activity in September 2022. The special administration does not change that position: it cannot accept new instructions or new funds. The administrators say its trading platform has been disabled and accounts have been frozen, so customers cannot transfer funds, request withdrawals, cancel existing transactions or enter new ones while the work begins.
This is a specialist insolvency route for payment and electronic-money institutions. Its objectives include returning customer funds as soon as reasonably practicable, engaging with the relevant financial authorities and market bodies, and then considering whether the company can be rescued or should be wound up in creditors’ interests. In this case, the customer-funds work is the issue most likely to matter day to day.
Claims will need to be checked against the funds held
Customers who believe the firm holds their money should contact the joint special administrators through verified channels, state the total they believe is held and retain documents that support it. Supplying that information is important, but the administrators stress that it is not itself proof of a claim and does not speed up a return.
The first operational task is to take control of the relevant money and reconcile funds in safeguarded accounts with the records of customers entitled to them. That process is more than an account-access problem: it establishes the pool of money, the people with claims to it and the practical cost of distributing it. No timetable, recovery rate or total distributable amount has been published.
The administrators say both the timing and the size of any return remain uncertain. They depend on factors including the remaining balance in the customer-funds account and the costs of returning money. Customers should therefore avoid treating an account balance, an old statement or an expected payment as confirmation of what will be returned.
Safeguarding is not the same as compensation cover
ePayments Systems was an electronic-money institution. Such firms are required to safeguard relevant customer money, normally by separating it from the firm’s own money in a designated account or by using qualifying insurance or a comparable guarantee. The purpose is to improve the prospect of returning money if the provider fails.
That protection is different from the Financial Services Compensation Scheme. Money held with a non-bank payment provider is not covered by the scheme in the way eligible bank or building-society deposits can be. The regulator’s consumer guidance says safeguarding means customers should receive most of their money back when an electronic-money firm fails, but recovery can take time and may be less than the full balance because costs can be taken by the administrator or liquidator.
It is also important to distinguish customer funds from other possible claims. Suppliers and other contractual counterparties may be creditors, while some customers may have complaints at different stages. Those groups may follow different claims routes. Anyone who has already referred a complaint to the Financial Ombudsman Service has been told that the service will contact them about the next steps.
Practical precautions while the process develops
Customers should keep statements, transaction histories and correspondence together, monitor updates from the administrators and use contact details obtained from verified official pages. They should not send new money to the firm. Unexpected calls offering to recover funds, especially requests for bank details or upfront payment, should be treated with caution and independently checked before any information is shared.
The key point is that special administration starts a reconciliation and return process; it does not establish that every customer will receive a particular sum on a particular date. Further updates from the joint special administrators will be needed before either can be known.
