Pay Day Lender Told to Pay Compensation

Wonga, the UK’s biggest pay day lender, has been told by the Financial Conduct Authority (FCA) to pay compensation of over £2.6M to around 45,000 customers for unfair and misleading debt collection practices.

This follows an investigation begun by the Office of Fair Trading who found that Wonga had sent letters to customers who were in arrears from non-existent law firms, threatening legal action.  In some instances, Wonga also added charges to customers accounts to cover the administration fees associated with sending the letters.  A spokesman for the FCA said “Wonga’s misconduct was very serious because it had the effect of exacerbating an already difficult situation for customers in arrears”.  In the agreement reached with the FCA Wonga must identify and pay redress to all affected customers.  Some customers will receive cash, others will likely have their outstanding balance reduced.  The FCA will oversee the process and ensure that all affected customers get what they are owed.  The situation is understood to have occurred between October 2008 and November 2010, and involved Wonga and other companies within it’s group. 

If you think you have been a victim you should either contact Wonga direct relating to compensation or speak to the Financial Conduct Authority.