The administrators say people may be allowed to submit claims in November 2020, if sufficient funds are available in the Administration for a distribution to be made to unsecured creditors. The administrators will also explain then what people who have already submitted claims, or who had claims agreed but not paid when the company went under, need to do.
But that “if” clause is important. The administrators are saying that there may not be any money to distribute, so in that case there would be no point in people submitting claims.
This is in line with the Administrator’s Proposals published in August which said:
Based on current estimates, it is uncertain whether there will be a dividend to unsecured creditors. As a result, at this stage we are not adjudicating customer redress and others unsecured creditor claims.
I don’t know how likely it is that there will be no money left. It may just be the administrators being very cautious. It may depend on how much they have sold the loan book to Perch for.
But even if there is no money to pay out, many Sunny customers will be concerned that their claims should be assessed as they will want unaffordable loans removed from their credit record.
Elevate Credit International Limited (“ECIL”), which traded as Sunny, 1 Month Loan and Quid went into administration on 29 June 2020. KPMG were appointed as Administrators.
Sunny joined the long list of lenders which have failed in the last year because of the increasing refunds to customers who had been given “unaffordable payday loans“: QuickQuid, Moneybox 247, Swift Sterling, Piggybank, Nextcredit, Peachy, Uncle Buck.
Administration is not a good result for customers – the FCA should act
Although I am encouraging people to put in complaints, they are now not going to get the full amount of compensation that FOS would have assessed.
This is not an acceptable situation.
In the case of Sunny, the FCA has known for several years that Sunny was not making good offers to complaints. Why has the FCA allowed this to continue?
And why has the FSCS not been extended to cover customers who have been given unaffordable loans?
I listed my proposals in More payday lenders go under – was anything learned from Wonga? and they remain relevant now. With every high-cost lender that goes under, the need for action by the FCA gets more urgent.
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