Wonga Still Damaging People’s Finances ‘From Beyond the Grave’
February 27, 2019
The collapsed payday lending company Wonga is still damaging the finances of thousands of people despite no longer being in business.
That’s the view of a committee of MPs who have called for people with complaints against Wonga to have their cases heard by relevant parties and addressed by both the Financial Conduct Authority (FCA) and the Financial Ombudsman Service (FOS).
Wonga fell into administration in August 2018, at which point as many as 10,500 people had made complaints about the company and how it had gone about selling them loans.
There was a sharp rise in the number of complaints made about the payday lender in the wake of significant changes to relevant regulations introduced by the FCA in 2014.
The new rules related primarily to issues of affordability and were designed to prevent Wonga from providing loan deals to people who it should have known could not afford them.
After Wonga entered administration, people who had complained about the way they were sold loans were left with their issues and their cases unresolved.
For its part, the FOS was not in a position to resolve the complaints left unaddressed and deals involving short-term credit companies did not fall under the jurisdiction of the Financial Services Compensation Scheme.
Having looked into the issue, politicians on a parliamentary select committee in Westminster have said that consumers with complaints against Wonga should undoubtedly have their cases heard.
“If Wonga continues to damage people’s finances from beyond the grave, it may be time for the government to intervene,” said Nicky Morgan, chair of the committee.
“These people have been left to fend for themselves by Wonga, the FCA and the FOS,” she said.
“They’ve been allowed to fall thought the cracks with nobody taking responsibility for their mistreatment.”
Statements given on behalf of the parliamentary committee also expressed concerns that many of the people who registered complaints against Wonga are “likely to be vulnerable” and could be left at a “significant financial disadvantage” if their cases are not heard.
A surge in valid compensation claims is understood to have been a key reason why Wonga was unable to stay in business and collapsed into administration last year.