Payday Lender Sunny Goes Into Administration – What To Do If You Have A Loan Outstanding
Sunny Loans became the latest lender to bow to tighter affordability controls and an increase in compensation complaints from claims management companies
Payday lender Sunny has entered administration, in a move that could affect thousands of customers across the UK.
The UK branch of Elevate Credit, which operates as Sunny, appointed directors of KPMG on Monday and will cease operations with immediate effect.
The company’s U.S. owners attacked the British government upon its exit, saying the rules around affordability checks were not clear enough.
“UK regulators were unable to provide any clarification that would allow Sunny to continue and, unfortunately, consumers’ choice for the safest and most reliable short-term credit option in the UK has stopped working, âsaid chief executive Jason Harvison.
“I would like to sincerely thank all of our UK employees and the thousands of Sunny customers who have placed their trust in us over the years.”
So far, Sunny has offered loans of Â£ 100 to Â£ 2,500, at a representative APR of 1,267%. It charged no fees, with interest capped at 0.8% per day.
However, he has been struggling for years.
Elevate Credit already filed a notice of intention to appoint directors last week.
A company spokesperson blamed the economic uncertainty due to the coronavirus as well as “continued regulatory pressure.”
Payday lenders have come under tremendous pressure due to tighter price caps and affordability controls in recent years, as well as an increase in complaints from claims management companies (CMCs).
Wonga collapsed in 2018 amid criticism of its high-cost loans, followed by rival QuickQuid in October last year.
Sunny Loans posted a pre-tax profit of Â£ 78,244 last year, a significant drop from the Â£ 5.7million profit in the previous year and despite revenue growth of Â£ 80million to 92 million Â£.
What if I still have a pending complaint?
Sunny’s parent company says customers can continue to submit complaints in the usual way while the company is under administration.
Any customer claim resulting from complaints filed against ECIL will be treated as an unsecured creditor claim. This means that there is a risk that you will not get full payout, even if you do win the deal, because you will join a long list of people and businesses that the company owes money to.
âPlease note that, if you are successful in making a claim against the Company, any cash payment you receive will most likely be significantly less than the amount of your accepted claim,â the website explains.
Will my loan payments stop?
You must continue to make payments in the usual way and interest continues to accumulate on overdue balances.
If regular payments are collected through a Continuing Payment Authority (“CPA”) or by a debt management company, you do not need to take any specific action as a result of the administration. , and your payments should continue as usual.
If you are making payments directly to Sunny via a debit card, alternative card, or wire transfer, you must continue to make payments through your online account.