Payday lender Wonga causing damage from “beyond the grave”
The finances of 10,500 borrowers are being “damaged from beyond the grave” by collapsed payday lender Wonga, according to a committee of MPs.
Wonga fell into administration in August last year, with these customers awaiting ombudsman rulings on whether they were mis-sold loans.
Many have given up hope of redress, and the Treasury Committee said their cases had been “cast aside”.
Wonga blamed a surge in compensation claims, in part, for its collapse.
These 10,500 Wonga borrowers had lodged complaints about previous payday loans being mis-sold due, in many cases, to their vulnerability and inability to repay.
They included Ashley, from Bristol, who used Wonga and other payday lenders to fund a gambling addiction – and to pay bills after his income had been frittered away – when he was younger.
Ashley, who is now debt-free, started borrowing about £100 a month, before the debt grew to £400 to £800 each month
The Financial Ombudsman upheld his complaint and deemed more than 40 of the loans to be irresponsible, but the ruling came at the time of Wonga’s collapse.
“I received a standard email from the administrators, saying the likelihood would be not receiving the full amount [of compensation]. I’ve actually given up on it,” he said. “It is a moral thing that they should pay.”