Are you being contacted by Bright Sky Loans UK about an outstanding loan? Are you unable to repay your loans? Are Bright Sky Loans UK threatening court action against you? Was the loan unaffordable at the time of receiving it? If these issues with Bright Sky Loans UK or any others are causing you concern, this article is just for you! You might be able to cancel your loan and even obtain a refund.
It’s not your fault. Complaints to the Financial Ombudsman have risen this year from 830 to 2,006, so it’s safe to say that you’re not alone.
Deal with your debt today and feel better tomorrow.
Who are Bright Sky Loans UK?
Bright Sky Loans is one of the leading short-term loan companies in the UK. The company offers unsecured loans between £500 and £20,000 and they are licensed credit brokers. The company is registered and regulated in the UK.
Are loan companies lending to the wrong people?
It is often far too easy for people to borrow money. There are lots of companies out there who are only too willing to lend to those who can’t afford to pay it back. They entice customers by telling them they will get their loan in minutes and they offer loans to those with a bad credit history. This leads to difficulties in repaying the loan, and a lot of stress for those who find themselves plunged into debt.
What causes debt problems and what are the government doing?
With promises of ‘loans in minutes’ and ‘loans for bad credit’, it is no wonder that many people have found themselves in debt. Although debt is still a major issue, it is much better than it has been, as there are tighter regulations on loan companies and their behaviour. The loan market toppled £2 billion at one stage, as a result of loan companies lending to people who couldn’t afford it, and charging excessive interest rates.
The Financial Conduct Authority realised that there were unfair practices among lending companies, and they started to introduce fines to combat this behavior. The fines were difficult for lending companies to afford, and they ended up putting some companies out of business. For example, Wonga received an astronomical £220 million fine, and The Money Shop were £15.4 million. The threat of being fined achieved results though, and the number of loans dropped from 10 million to 1.8 million, which was quite a good outcome. The amount of lenders also dropped significantly from 240 to 60.
Are you due a refund? Read through the next section in which we look at these new rules in some detail. If Bright Sky Loans UK is in breach YOU MAY BE DUE A REFUND EVEN IF YOU HAVE PAID OFF THE LOAN.
The introduction of caps on loan interest and other charges
As a result of the research conducted into lenders and their behaviour, the Financial Conduct Authority had to introduce price caps, which were designed to protect borrowers from over the top charges. The caps included:
- 0.8% daily cost cap on the amount you have borrowed – including both interest and all fees charged.
- default fees cap of £15 – default interest may still be charged after this, but it cannot be more than the original rate of 0.8% per day.
- complete cost cap of 100% – you should not be asked to pay more than 100% of the money you have borrowed.
The limits are relevant to credit agreements with an interest rate of 100% or more per year and that will be either fully or substantially repaid in a year,
There are other regulations which came into force in May 2017. These meant that lenders must now provide details of all their products on a price comparison website which is authorised by the FCA and they must also provide borrowers with a summary of the total cost of borrowing.
If you have found that Bright Sky Loans UK have failed to adhere to the regulations and they are trying to charge you more than they should be paying, your credit agreement may be unenforceable, which means they cannot make you pay back the loan.
Find your best debt solution (in 1 minute!)
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It is important to find out if the loan company is authorised, before you start making any payments. If they are not authorised, you do not have a responsibility to pay them, as they won’t have the right to make the credit agreement. If you stop paying them, they won’t be able to do anything about it. There are various ways to find out if Bright Sky Loans UK is authorised.
If you wish to check whether Bright Sky Loans UK is authorised, you can enter the name of the company on this Interim Permission Consumer Credit Register search page. Alternatively, you may search the financial services register here. If there is no valid up to date entry on any of these registers, you should just stop paying them. They can not enforce the payment without this registration.
There are also other ways to find out if Bright Sky Loans UK are operating illegally. This includes little information on their website, or information which is clearly out of date. If there is no disclosure of the APR they are charging, this could be another sign that they are not authorised to be chasing you for the money.
Why you might need to complain about Bright Sky Loans and what to do
If Bright Sky Loans UK have failed to adhere to the regulations, and they are not treating you fairly, you may be entitled to make a formal complaint. If Bright Sky Loans UK do not respond to your complaint, or you are unhappy with the outcome, you have the right to escalate it to the Financial Ombudsman.
It is easy to make a complaint, but you must make sure you have all the relevant details for the complaint, including evidence to support it. This might comprise of call logs, emails and/or text messages. The more evidence you have to support your claim, the easier it will be to get a satisfactory response.
You have the right to receive a response from Bright Sky Loans UK, and one which you are happy with. If this is not the case, you can escalate it to the Financial Ombudsman. You can reach them directly by calling on 0800 023 4567 or 0300 123 9123.
If the Financial Ombudsman find that Bright Sky Loans UK have not treated you fairly, you may end up receiving a refund, even if the loan has been paid off within the last six years. If this is the case, you may also end up with a refund on any interest paid, as well as any other charges.
You may also be able to get the loan removed from your credit record, if it is deemed that it was unaffordable to you. The outstanding balance may also be cancelled.
You must write to the lender in the first instance, stating what your case is and requesting compensation.
If there is no satisfactory response within 8 weeks, you may wish to follow it up with Financial Ombudsman by phone on 0800 023 4567 or 0300 123 9123.
Continuous Payment Authority – changes you need to know
In most cases, your debt repayment will be set up using a Continuous Payment Authority (CPA.) Which means that the lending company can just take payments from your account, whenever it suits them. Although they should, out of respect, let you know when they are planning to do this, many don’t, and it can leave borrowers in a very bad situation. You may receive your salary into your account one day, only for it to be whipped out the next due to debt recovery.
When you are already struggling with important bill, such as your rent or mortgage, and Bright Sky Loans UK decide to take a full payment out, this could leave you in a dreadful situation, where you might not be able to put food on the table or pay for the essentials.
There are new regulations which have been put in place, which mean that if the CPA has been attempted twice without success, there can be no further attempts from Bright Sky Loans UK.
Other changes to the rules stipulate that only the full amount of the debt can be taken, the lending company are not permitted to take partial payments anymore, unless you give them express permission to do so. If you give them permission to take partial payments to clear the debt, this would be allowed. If they are breaching these regulations though, you have the right to make a complaint against them.
In cases were Bright Sky Loans UK have attempted to take the payment on more than two occasions, or they have taken a partial payment without your permission, they are breaching the regulations. You have the right to report them to the financial ombudsman, who you can reach on 0800 023 4567 or 0300 123 9123.
What if you set up a repayment plan, but can’t afford to pay it?
If you have found that Bright Sky Loans UK have been acting in a lawful way, and you have set up a repayment plan, but you can’t afford to pay the monthly payments, there are some steps you can take.
If you have set up a CPA, standing order or if you have a direct debit arranged, you can speak to your bank directly and cancel it. Alternatively, you can do this via online banking. This will give you back control of your account. You may be advised by your bank to contact Bright Sky Loans UK and let them know your plans to cancel the repayment plan, but you have no legal obligation to do this. It will just save you the hassle of having to deal with their calls/letters when they call to discuss the cancellation.
Cancelling the payments does not mean that you no longer owe the money, you will still be required to pay it back. You may want to contact Bright Sky Loans UK and ask them to delay the payment plan until you have the funds available. For instance, if you are starting a new job. It is important to discuss the situation with them, and no matter what, they have a responsibility to treat you fairly.
The law is there to protect you, and it states that:
- Lenders must inform you of places to get debt advice.
- They must hold off debt recovery for a period of time which allows you to get your finances back on track.
- They should freeze interest and additional charges, where applicable.
Can you roll the loan over?
You can roll your loan over and Bright Sky Loans UK will probably suggest this, but it is not a good idea. This is for the simple fact that when you roll it over, it just accumulates more and more interest and charges. The best thing to do is to set up an affordable repayment plan.
Where to get free debt help
Many people struggle to pay their debt, and luckily, there are organisations out there who provide free advice and support on clearing your debt. These include:
Should loan companies be avoided?
We should establish one thing; not all loan companies are bad, despite their reputation. In some cases, they provide an extremely valuable service to those who can’t afford to get loans via traditional sources, such as banks. They offer a lifeline to many, but it is important that the service they provide is fair, and not exploitative of the situation borrowers find themselves in. The new regulations mean that there are less loan companies acting in an unscrupulous manner.
If you have found that Bright Sky Loans UK have been acting in a way which is in breach of the regulations, you do not need to pay them. You can contact the Financial Ombudsman, who will deal with the situation on your behalf. Alternatively, if you just can’t afford to pay them, contact one of the organisations above who will provide you with free debt advice.
If you can’t pay back your loan do check out my other article here.