Wealth Manager - the site for professional investment managers

Register to get unlimited access to Citywire’s fund manager database. Registration is free and only takes a minute.

Wonga to pay £2.6 million compensation over 'unfair practices'

Wonga to pay £2.6 million compensation over 'unfair practices'

The UK’s biggest payday lender Wonga is to pay more than £2.6 million of compensation for using ‘unfair and misleading debt collection practices’.

The payouts, agreed in a deal with the Financial Conduct Authority (FCA), will see around 45,000 customers receive duress.

An investigation into the firm, which was started by the Office of Fair Trading (OFT) and taken on by the FCA, found the lender sent letters to customers in arrears from made up law firms, threatening legal action between October 2008 and November 2010. In some cases it even added admin fees to customers’ accounts to cover the cost of the letters.

Clive Adamson, director of supervision at the FCA, said: ‘Wonga’s misconduct was very serious because it had the effect of exacerbating an already difficult situation for customers in arrears.

‘We are pleased that Wonga has been working with us to put matters right for its customers and to ensure that these historical practices are truly a thing of the past.

‘The FCA expects firms to pay particular attention to fair treatment of those who have difficulty in meeting their loan repayments.’

The FCA said it had appointed a ‘skilled person’ to oversee the process and ensure all customers affected receive redress.

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.
Citywire TV
Brewin's Gutteridge: Yuan direction

Brewin's Gutteridge: Yuan direction

This week Brewin Dolphin's research head chats to Fidelity Asian Investment Directors Jenny Lee and Gary Monaghan about the big changes in China.

Play On the Road Challenge: horsing around on the polo pitch

On the Road Challenge: horsing around on the polo pitch

Libby Ashby takes to the polo pitch with Stuart Leigh-Davies from Redmayne-Bentley for an 'On the Road' challenge.

Brewin's Gutteridge: where Miton's Godber sees value

Brewin's Gutteridge: where Miton's Godber sees value

This week Brewin Dolphin's research head talks to George Godber, co-lead fund manager of the Miton UK Value Opportunities fund, about value investing.

Your Business: Cover Star Club

Profile: what tempted Brewin's Glasgow team over to Rathbones?

Profile: what tempted Brewin's Glasgow team over to Rathbones?

Rathbones’ Glasgow office has only been open for three months but the team, led by Angus Kerr, has already attracted new clients

Wealth Manager on Twitter