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 trades as Sunny, appointed administrators from KPMG on Monday, and will stop trading with immediate effect.
The company's US owners took a swipe at the UK Government on its way out, saying that the rules around affordability checks had not been clear enough.
"Regulators in the UK were unable to provide clarity that would allow Sunny to continue and sadly, the consumers' choice for the most safe and reliable short-term credit option in the UK has ceased operations," said chief executive Jason Harvison.
"I would like to give my sincere thanks to all of our UK employees and the thousands of Sunny customers who trusted us over the years."
Until now, Sunny offered loans of £100 to £2,500, at a representative APR of 1,267%. It charged no fees, with interest capped at 0.8% per day.
However, it has been struggling for years.
Elevate Credit already filed notice of intent to appoint administrators last week.
A company spokesman blamed the economic uncertainty due to coronavirus as well as "continued regulatory pressure".
Payday lenders have been under immense pressure because of price caps and tougher affordability checks in recent years, as well as a surge in complaints from claims management companies (CMCs).
Wonga collapsed in 2018 amid criticism over its high-cost loans, followed by rival QuickQuid in October last year.
Sunny Loans, reported a pre-tax profit of £78,244 last year – significantly down on the £5.7million profit made the previous year and despite revenues growing from £80million to £92million.
What if I still have an outstanding complaint?
Sunny's parent company says customers can continue to submit complaints in the usual way whilst the company is in administration.
Any customer claims that arise from complaints made against ECIL will be treated as an unsecured creditor claim. This means there is a risk you won't get a full pay-out, even if you win the case as you will join a long list of people and firms owed money by the company.
"Please be aware that, if you successfully make a claim against the Company, any cash payment that you receive is highly likely be substantially smaller than your accepted claim amount," the website explains.
Will my loan repayments stop?
You should continue to make payments in the usual way, and interest continues to accrue on outstanding balances.
If regular payments are collected through a Continuous 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 make payments directly to Sunny via debit card, alternative card or bank transfer, you should continue to make payments through your online account.
