In November 2019, many people hoping for a payday loan refund from Sunny were watching for the third-quarter results from Elevate, Sunny’s US parent.
Would Elevate decide to close Sunny, so they wouldn’t get their refunds?
In late October QuickQuid had gone into administration after its American parent announced it was exiting the UK. That left Lending Stream, Myjar and Sunny as the largest payday lenders in Britain.
But on 4 November, Elevate’s results were fine. Elevate’s CEO said:
“In the UK, we continue to scale back growth due to the lack of regulatory clarity. In the interim, our business remains profitable and we see expanded, long-term potential”.
This future potential comes from “so little supply” and Sunny’s lower customer acquisition cost due to “diminished competition“. In other words, Sunny expects to be able to get more business and make higher profits with QuickQuid gone.
But why is Sunny unclear about UK regulation?
Background – payday loan regulation
Before April 2014, payday lenders were regulated by the Office of Fair Trading (OFT). The OFT issued Irresponsible Lending Guidance which said that:
“all assessments of affordability should involve a consideration of the potential for the credit commitment to adversely impact on the borrower’s financial situation, taking account of information that the creditor is aware of at the time the credit is granted.”
a loan is able to be repaid “in a sustainable manner” if it can be repaid “without undue difficulty – in particular without incurring or increasing problem indebtedness“.
After the FCA became the regulator in 2014, its CONC rules on affordability took the same approach:
CONC 5.2A.12 The firm must consider the customer’s ability to make repayments under the agreement:
… (3) without the customer having to borrow to meet the repayments;
(4) without failing to make any other payment the customer has a contractual or statutory obligation to make; and
(5) without the repayments having a significant adverse impact on the customer’s financial situation.
What checks on affordablity have to be done?
The FCA doesn’t spell out exactly what checks a lender has to make that a loan is affordable. But it talks about:
how much information is sufficient for the purposes of the creditworthiness assessment, what information it is appropriate and proportionate to obtain and assess, and whether and how the accuracy of the information should be verified.
FOS has published several “Key Decisions” about payday lending affordability. These are decisions which FOS thinks contain points which will be applicable to other similar cases and they cover the regulations in detail.
Here is what the ombudsman decided in one case about when a lender should have to check in detail that a loan is affordable:
I think that a reasonable and proportionate check ought generally to have been more thorough:
- the lower a customer’s income (reflecting that it could be more difficult to repay a given loan amount from a lower level of income);
- the higher the amount due to be repaid (reflecting that it could be more difficult to meet a higher repayment from a particular level of income); and
- the greater the number and frequency of loans, and the longer the period of time during which a customer has been given loans (reflecting the risk that ongoing use of these loans may signal that the borrowing had become, or was becoming, unsustainable).
Similar words are commonly used in other FOS decisions about affordability complaints, not just for payday lending.
FOS’s emphasis on the number of loans and the length of time someone is borrowing from a lender was mirrored in the FCA’s letter to high cost lenders in March this year. This identified “a high volume of relending, which may be symptomatic of unsustainable lending patterns” as a key driver of consumer harm.
Typical FOS decisions on Sunny complaints
Sunny’s business model seems to involve giving small loans but a lot of them, often letting a borrower have several at once.
People who think their Sunny loans are unaffordable – they could only repay them by borrowing again – are making an affordability complaint and asking for a refund of the interest they paid. This is explained in detail in How to ask for a payday loan refund which has a free template letter you can use.
When FOS considers an affordability complaint about a lot of small payday loans, it looks at whether the loans were unaffordable for the borrower and when the lender should have realised that the borrower was becoming dependent on these loans.
So the typical FOS decision is usually to refund all loans after the first few. And this is exactly what FOS decisions on Sunny cases are showing.
Here are some comments left by Debt Camel readers over the last few months:
- Adjudicator has suggested that Sunny pay all interest on loans 6-14.
- Adjudicator rules in my favour for loans 5-42 with sunny. They have already agreed to pay me £2800 for loan 37-42.
- The adjudicator has upheld my complaint against sunny for loans 5-15.
- My adjudicator ruled in my favour … 54 loans out of 58.
- Adjudicator said sunny should refund loans 6-122. [That wasn’t a typo, I checked with the reader and she really did have 122 Sunny loans.]
- Adjudicator has come back today and said he thinks sunny should refund me for loans 3-26.
- Adjudicator recommends Sunny refund loans 5-35.
- Adjudicator has emailed me and has agreed loans 4-31 with Sunny should not have been lent.
- The adjudicator upheld my complaint with Sunny for loans 7-37.
- The adjudicator has said in the email that [Sunny’s offer to refund loan 46 to 53] was unfair and that Sunny should refund me from loan 5 to loan 53.
No-one has said that their FOS adjudicator agreed with Sunny that only the later loans in a long series should be refunded.
That looks pretty consistent to me!
Sunny isn’t learning from FOS decisions
The FCA’s DISP rules say that a lender should learn from FOS decisions and adopt that approach in how it responds to complaints. But there is no sign of Sunny doing this.
Here are some examples of poor offers or rejections from Sunny on cases that sound very strong:
- 49 loans with them over 3 years continuously, offered me 37-49 (£2,100).
- I had 30 loans from them between 2017-2019. As a goodwill gesture they’ve offered to write off my remaining balance of around £70.
- The complaint has been rejected. I thought I had a strong case I carried out 70 loans with no breaks in borrowing. Paying back a total of over 30,000.
And Sunny seems to be rejecting far more adjudicator decisions and forcing the case to go to an ombudsman than is reasonable.
So what isn’t clear?
What the Financial Conduct Authority (FCA) is saying and the Financial Ombudsman (FOS) decisions on Sunny complaints seem both clear and consistent.
I am not surprised that Sunny doesn’t like these decisions. But I think it’s hard to say they are unclear.
I am sure FOS and the FCA would be happy to have a meeting with Sunny to explain, once again, how FOS is deciding affordability complaints.
Sunny basically has three options. It can accept the FOS approach and apply it to future complaints. It can decide to go to court and ask for a judicial review. Or it can give up and go out of business.
To carry on making absurdly low offers or rejections to customers with a lot of loans is not an option.
UPDATE – comments on this page are now closed.
For the latest news on Sunny, read 500,000 Sunny customers owed refunds will get little or nothing and leave your comments there.
John says
Hi,
I had 54 loans with sunny between October 2016 and November 2018. Loans were paid off and taken out continuously over this period and the longest break between them was maybe 5 weeks or so but I still had loans with them at this point.
I have submitted my complaint for unaffordability to elevate and they say they are looking into it.
I have provided bank statements from over this period of time and it shows how I was in debt to many payday lenders and I was in fact a gambling addict, ergo I used to pay them off and take them back out almost immediately with Sunny. This cycle has forced me into a debt management programme.
What do you think my chances are for receiving a redress for the interest I paid on my sunny loans over this prolonged period and do you have any tips?
Sara (Debt Camel) says
Sunny may offer you a refund on the last few, but if you go to FOS you may get a refund on all apart from the first few… that’s my guess! So be prepared for a poor offer and send it to FOS – come back here if you aren’t sure.
Tip – get going on complaints to all payday lenders you used more than a couple of times, dhese complaints can sometimes take a long while so don’t try to to them one at a time.
John says
That’s a great help, thank you. I need to wait until sunny have made their decision don’t I before I can get the ball rolling with the FOS?
Sara (Debt Camel) says
Yes – or you can go to FOS at 8 weeks if sunny haven’t responded by then.
Matt C says
Just to anyone else dealing with the FOS in regards to Sunny – they were a week late responding to the adjudicator and the FOS have sent it to an ombudsman.
It seems they are not responding to a lot of people now – they didn’t even come back with an offer after the adjudicator decision which I was surprised at after having 16 of 19 loans upheld in the decision.
Now I face a lengthy wait by the sounds of it.
Craig Bryceland says
Ombudsman gave sunny to the 11th of may to respond to mine and they never got back to them still haven’t
41 Loans out of 47 approved
Nick says
I accepted an offer from Sunny/Elevate Credit, provided my account details 4 weeks ago and in spite of my optimism I have had no correspondence whatsoever since. I’ve emailed the customerrelations@ email address on numerous occasions and the operations director as some have suggested this can expedite things but still nothing – can’t help but start to become concerned that the fairly sizeable redress amount wont be paid… :(
Vicky says
Have you had any corespondance yet from them?
I am in my 28 days of awaiting a refund and them removing the loans from my credit file and wondered if you’d had any update?
Nick says
I have, the monies appeared in my account on the 23rd day after I provided my bank details – I did not receive any email correspondence either before or after confirming that they were doing/had done so.
I’m still awaiting the entries being removed from my credit file
Vicky says
Thanks Nick, really appreciate you coming back to me. The removal of the credit file entries are actually more important to me as I am applying for a Mortgage so this gives me an idea of some timescale. Thanks again!
Nick says
I applied And was accepted for a mortgage in June of last year. The entries on my credit file actually had far less of an impact than I had anticipated. My fingers are crossed for you!
Mali says
Good morning, this week I received the Ombudsmans final decision after nearly 18 months. The decision states that sunny have upto eight weeks to sort out my redress. Does anyone know if it will take the full eight weeks?
Luucy says
I’ve today had a reply regarding Sunny rejecting the adjudicator decision of refunding loans 5 to 9 and 16 to 29. They have said they will refund loans 22 to 29 .
The refund they said they will give me is just over £1000.
I’m a self employed home carer for the elderly whose work has depleted because of the coronavirus, so £1000 in my bank account would be welcome , but I am managing atm.
I know its ultimately my decision , but just wanted to know what the chances would be of Sunny increasing the offer if FOS get involved.
Thankyou
Tamara says
Hi
Regarding Sunny – 30.04.2020 I got an email from adjudicator about Sunny’s offer to paid the redress -they suppose to pay me within 4 weeks.
I sent 2 emails to Sunny asking what with my money – got only auto-response, so I reported to adjudicator about delay.
I tried before talk to Sunny directly ( 20.06.2019 ) but they refused so I sent my complain to FOS ( 09.2019 )
Chris says
Hi guys,
So last year I put in a complaint to sunny which they didn’t agree to.
I then went to adjudicators who ruled in my favour but sunny only agreed to parts of these loans.
I refused the offer and this went to the obudsman who today ruled in my favour. Which I just replied to and accepted.
Does anyone know what happens now and how long / if I’m likely to see this money?
Thanks
Chris
Craig says
Hi chris
I am in a similar situation to yourself, made a complaint last year and refused their offer, now ombusmund found in my favour and sunny have come back with another partial offer, I think I’m not going to accept this offer either. May i ask what the process was after rejecting the offer and going for a final decision from the ombusmund? And how long it took, thanks
Chris says
So it went to the obudsman in jan during this time sunny made one last offer which was still rubbish …basically they just accepted the cheap loans and not the ones that they owed me a lot. So five months
I’m not sure how long sunny have to pay after final o yd’s man and if they will still refuse we shall see
Craig says
Does anyone know if the final decision can end up working out less than what the adjudicator advised sunny pay back, don’t want to end up losing out taking it further
Sara (Debt Camel) says
Say the adjudicator said to refund loans 6-30. And Sunny have come back with a poor offer to refund say 22-30.
In theory the ombudsman can make any decision. In practice it is normally the same as the adjudicator but is sometimes different by a few loans, eg it could be 4-30 or 9-30, so better or worse than the adjudicator offer.
It is very rare for the ombudsman decision to be very different from the adjudicator – although it can happen it tends to mostly be for small number of loans cases. For Sunny cases where there are a large number of loans, I don’t remember a case in the last couple of years.
Craig says
Ok, thanks Sara
Danny says
I have just had a decent offer from the FOS adjudicator from sunny, only missing x2 loans from the adjudicator rulings, having accepted through the ombusman I’m waiting to hear what the next steps are, does anyone know? As I’ve accepted an offer are sunny more likely to pay quicker, what are the timescales?
Andy Saunders says
Complained to the fob, about elevate. But elevate didnt respond by the set time. So now the ombudsman is going to make a decision, based on my information.
“Because Elevate Credit International Limited didn’t reply, an ombudsman will review the complaint and make a final decision. If the ombudsman’s conclusions are different to mine, they will explain why and let you reply before they give you their decision. We’re required to publish final decisions by our ombudsmen on our website.
We should already have all the information the ombudsman needs to reach a decision. But if we need anything more from you, we will let you know”
“If you have any further points or information you want the ombudsman to consider, please send these to us by 19 June 2020.
If you need more time to reply, please let me know before this date. If I do not hear from you, I will assume you do not want to add anything.
We will keep you up to date with our progress – but please get in touch if you have any questions in the meantime.”
And is there anything I could add to help my case?
Also how likely will my case be favoured?
Thanks,
Andy
Sara (Debt Camel) says
were you happy with the adjudicator decision on your case?
Craig says
I’ve had this response from the adjudicator after asking the next steps if I was to decline this offer. Not sure if I’m reading into it too much or she’s trying to gently nudge Me towards accepting this offer, as in it may be best considering what’s going on in the world right now and financial states of company’s?
If you reject the offer the next steps will be to process the case for a final decision to the ombudsman. However, I’d like to inform you that there are delays with processing this at the moment and it may take over a month for the complaint to be reviewed by an ombudsman as there’s a queue.
Also the ombudsman’s decision is the final decision, it is legally binding and will be published.
I would like you to think about the offer again because the amount on offer is £2,083.70 and the removal of loans from loan 24 onwards on your credit file, which might help in this current situation.
And note that we cannot guarantee redress payment in the future if the business does not have financial means.
Sara (Debt Camel) says
I’m not sure that is a nudge so much as being open.
Craig says
It’s made me think, don’t want to end up being in the same situation as I was with wonga going bust
Vicky says
I was in the same situation as you and accepted a lower offer as I didn’t want the risk of losing like I did with Wonga. Accepted 15/05 and the redress was in my bank yesterday, just waiting now for the loans to be removed from my file.
Andy says
Hi Vicky, how long did it take for the funds to be with you after you accepted your refund?
Stay safe Andy
Vicky says
Hi Andy
I used a Payday Loan Claim Company to do mine for me and my timeline went like this:
Complaint sent to Sunny: 30/08/2019
Sunny Acknowledged the complaint: 05/09/2019
Sunny replied and did not uphold my complaint: 24/10/2019
Claims company refered to Financial Ombudsman: 22/11/2019
Adjudicator assigned to the case: 12/12/2019
Adjudicator completed the assessment: 04/04/2020
Sunny made an offer not in line with the adjudicator: 07/05/2020
I accepted this offer (didn’t want another Wonga scenario happening) and was sent to FOS and Sunny: 15/05/2020
Money was in my bank: 05/06/2020
Hope this helps!
Andy says
Hey Vicky, thankyou for the responce glad you are all sorted now. I had my offer today and accepted it didn’t want the repeat of wonga either. They offered a redress of over 3k what im happy with. Hopefully I get it before they fall into administration like all the others.
Thanks,
Andy
Vicky says
My fingers are crossed for you, I’m sure you’ll be fine!
Andrew Kelso says
If someone took out 122 loans with sunny I dont see that it’s the fault of sunny fully. They shouldn’t have given some one that many loans but on the other hand people shouldn’t be applying for that many either.
Sara (Debt Camel) says
So the people getting the loans were not good with money. They may have been desperate. Or had mental health problems. Or thought they were doing the right thing and trying to protect their credit record.
But Sunny were ignoring the regulations about affordability checking so they should not be allowed to profit from peoples problems, hence gaving to refund the interest on the loans.
Jack says
Hey Sara, I have accepted the FO final decision and signed my name away and it is now legally binding, will this mean I will still get my funny amount even if Sunny goes into administration? (Not that I wish it will go into adminstration) does anyone know how long they take to email you after you accepted final decision from FO with the calculations?
Sara (Debt Camel) says
No, if they go into administration (and I have NO reason to think this is happening in the next month!) you are just another unsecured creditor and will probably (judging by the experience of other administrations) get a tiny percentage in a year or 18 months.
Julie says
Hello.
I made a complaint with sunny back in May 2019. They didn’t uphold my complaint so it went to FOS. An adjudicator came back to me last month (May 2020) saying they should refund me back the interest on loans 4 to 9. Sunny didn’t agree with the adjudicator and made a counter offer of refunding loans 6 to 9. It went to the financial ombudsman and he said they should refund the interest on loans 3 to 9. I accepted this and I emailed elevate to ask if they needed my bank details and they replied with “I can see we received confirmation of your acceptance from the Financial Ombudsman on 03/06/2020, therefore we will be in contact within 4 weeks of this date to arrange any redress due, as per the Financial Ombudsman guidelines”. They know that the decision made by the FO is legally binding and they have to pay me monies owed. Will they really hang it out for the full time allowed or will they pay quicker?
Danny says
Just accepted an offer from sunny, and had email today asking for bank details, they say 28 days but has anyone had payment sooner?
Ben says
Much like the rest of the comments I had a complaint rejected by Sunny, went to the ombudsman and the adjudicator upheld my complete for about half the loans in question. Sunny then objected and make a really poor offer which I rejected. I finally got the ombudsman decision last week and it was inline with what the adjudicator found so I have accepted this. Its now been a week with no contact from Sunny and I noticed today that they are no longer accepting new applications.
Think this could be a sign they are about to go bust?
Sara (Debt Camel) says
Someone else mentioned their website wasn’t taking any loan applications yesterday.
Firms that go bust sometimes stop lending a few days before, so this could be a sign Sunny is in trouble. But there have been times where a lender is changing its website and halts lending while it does this. 118 Money’s site was down for a couple of weeks earlier this year because of a data breach.
I hope your money is paid soon.
Andy says
My account with them, has been closed. With a remaining balance of £48 written off. Following a complaint I hope I get paid soon.