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Wonga Collapses

By rotide
Created 01/09/2018 - 08:51

Wonga, one of the so called Payday lending companies that have blighted the finance markets in recent years, has gone into administration. Not such a bad thing some would say given their history of awful customer treatment, resulting in compensation claims from over a quarter of a million of them for various misdemeanours. Just one of which was sending out debt chasing letters from fake law firms, when payments on loans taken out with interest rates over 5,000 %, were not being repaid on time. In theory the loans were designed for two week borrowing but when they were rolled over, the interest due spiralled out of control very quickly, causing widespread financial difficulties to a vulnerable section of society, clearly already short of funds.

Between 2006 and 2014, the various citizens advice bureaus across the UK were inundated with enquiries from distressed borrowers unable to make the regular payments and being harassed to do so. When the Financial Conduct Authority stepped in to give the cowboy industry a framework and borrowers some protection, in 2014 the complaint numbers eased off a little and so did the rates, which are still in many areas over 1,000%. Recent Wonga rate given as 1500%.

The co-founders  ‎Errol Damelin [1]‎; ‎Jonty Hurwitz [2] basically cashed out in late 2013, having founded the company in 2006, just before some form of regulation hit the industry in the UK.

Source URL:
https://www.newbusiness.co.uk/content/wonga-collapses