Sunny Side Down

We had the oddest call to the NTI Helpline this morning. Someone who called himself 'Sonny' said that he urgently needed £125m in cash and was prepared to pay a 'reasonable interest rate' of around 950 per cent. Apparently he gets paid in about a week and needs a little wonga to tide himself over.

Sonny's Dad, Elevate Credit International Limited (ECIS), which offered loans under the Sunny brand (previously known as 1 Month Loan and Quid) is also in a lot of trouble. ECIS filed a Notice of Intent to Appoint Administrators last week, so it wasn't a huge surprise, but the two remaining members of the KPMG's national restructuring and advisory team who are not working on Intu and saving the hospitality industry have been appointed as Administrators and have eight weeks to publish their proposals as to how they will run the job. Sunny had around 50,000 customers on its loan books and offered short-term loans of between £100 and £2,500 (though it preferred not to refer to itself as a payday loan company). KPMG not unsurprisingly says that Sunny customers will still need to carry on repaying their loans in the usual way. Sunny customers have responded by reportedly saying, 'You wot?'.

The news is also not surprising as the Financial Ombudsman (FOS) received 2,897 complaints about Sunny in the last half of 2019 and it agreed with the customer in 76% of the cases. This is more than twice as high as the average FOS uphold rate across all cases, which was just 35% for that period. Also, QuickQuid, 247Moneybox, PiggyBank, Peachy, Uncle Buck and WageDay Advance, who did not object quite as much to calling themselves payday loan companies, have suffered the same fate in the last 12 months, following the more newsworthy demise of Wonga in 2018. It appears that, with paydays for many being many, many days away the industry just cannot cope. It also appears that Sunny has given out a lot of unaffordable loans. and in some cases customers have (IT IS ALLEGED) borrowed continuously from Sunny for more than a year, some of them have had more than 40 loans.

Keep paying back the loans people. KPMG are in charge now.