Have you had an email from the Sunny Administrators?
On 4 November 2020, KPMG, the Administrators of Elevate Credit International, are starting to email more than 500,000 Sunny customers who could get a refund for some of their borrowing.
The Administrators have developed a Claims Calculator to work out which loans were likely to have been “unaffordable”.
If you get this email it is because they have decided some of your loans were unaffordable.
Sunny had about 700,000 customers, so for 500,000 of them to have been mis-sold loans is a shockingly large number.
By contrast, the Wonga administrators only had to pay out to about 400,000 customers. (Although that was because not all Wonga customers put in a claim. The Sunny administrators have been fair and assessed all customers. So we know that half a million figure is right.)
The Administrators are also warning there may not be enough money to distribute if too many people make claims. Even less than the Wonga customers received.
Background to the Sunny administration
- Affordability complaints: How to get a payday loan refund – with template letters
- Sunny’s payday lending – concerns about regulatory clarity
- Kerrigan v Elevate – Sunny loses a major court case
- Sunny goes into administration
- Sunny administration – some loans written off & the rest sold to a debt collector
No refund unless you now make a claim
You won’t be automatically paid a refund. When you have this email, you still have to submit a claim for your refund, but it will be easy.
The emails are going out in batches, so don’t worry if you haven’t had one – but check your spam folder. You can still put in a claim even if you haven’t received the email.
To make a claim, log into your Sunny “MyAccount”. If you can’t do this, contact customer services on 0800 7315 444 in order to reset your details.
When you are logged in, it will say how much redress has been calculated for you and you can then submit a claim.
This applies even if Sunny had agreed to pay you money before they went under, you had won your case at the Ombudsman or if you have sent Sunny a complaint – you still have to submit a claim now.
The deadline for claims is the end of January 2021.
If you disagree with the amount calculated, you can manually submit a claim for another amount for assessment by the Administrators. As so little will be paid out you may feel there is no point in doing this.
You may only get 1% of that redress… or nothing!
You will not get the full amount of that redress figure that has been calculated.
The Administrators are warning that there is very little money to distribute – they call this “a dividend”. If too many people claim, there may be nothing:
If a very high volume of claims and queries is received, it is likely that the operating costs of responding to queries and processing and adjudicating claims will become so high that no funds will be available for a dividend to be paid to creditors.
If a lower volume of claims and queries is received and a dividend can be made, the dividend is likely to be a very low percentage of your claim… we estimate that any dividend payable could be less than 1p in the £ and that any payment would likely be made in Spring 2021.
If it is decided that there aren’t enough funds to pay any dividend, the Administrators will apply to the court for permission to donate the remaining money to a debt charity.
Of course this news could put off so many people from claiming that hardly anyone does… in which case those that do may get a refund.
Your credit record will be cleaned this month
The only good news here is that the Administrators are going to automatically clean up your credit record:
- for the first five of the loans that have been decided to be unaffordable they will remove any defaults or missed payment markers;
- all unaffordable loans after the first five will be deleted from your credit record.
This is trying to follow what the Financial Ombudsman typically did in Sunny cases where there were a lot of loans.
The credit record updates and deletions should be done by the end of November. You don’t have to do anything to get this to happen. The loans will be cleaned/deleted even if you do not put in a claim.
If there is any chance you may want to make an affordability claim in future about anything – credit card, overdrafts etc not just high cost loans – then I suggest you immediately take a copy of your credit records while they still show the Sunny loans. See Get your credit records for free for how to do this.
“Ripped off by Sunny, now let down by the regulators”
Many people will feel horrified when they see all the loans that have been assessed as unaffordable and the large amount of interest they paid on those loans.
It isn’t the Administrators fault the refunds will be so low, they are just dividing up what money there is.
It is the Financial Conduct Authority’s (FCA) fault:
- despite the rules about checking affordability, Sunny was allowed to carry on lending;
- the FCA didn’t insist Sunny had enough capital to pay out compensation claims; and
- the FCA hasn’t provided any back-up scheme to pay the compensation. If a PPI firm went bust, you would still have received a PPI refund in full from the FSCS scheme – but that doesn’t apply to payday loans.