Wonga have today announced that it is writing off £220m of debts for 330,000 customers and has put in to place new affordability checks. Many Harrington Brooks customers have a loan with Wonga and will be affected by this.
- For approximately 330,000 customers who are in arrears of 30 days plus, as at 2 October 2014, Wonga has agreed to write off all outstanding debt.
- Approximately 45,000 customers who are in arrears of up to 29 days, as at 2 October 2014, will be asked to repay their debt without interest and charges, and will be given an option of paying off their debt over an extended period of four months.
- Wonga will be proactively contacting all customers affected by 10 October to notify them if they will be included in the redress programme.
- Customers should now continue to make payments unless they are told to stop by the firm.
- Borrowers who are experiencing financial difficulty, should contact Wonga to discuss their options.
- The company, which has faced criticism for its debt collection tactics, says the new checks have been implemented after discussions with regulators.
Those customers whose loans would not have been made under the new checks will have their debts written off and a further 45,000 customers will not have to pay interest on their loans.
So what’s brought this about?
Wonga’s chairman Andy Haste, who joined the company in July, had been in talks with the Financial Conduct Authority (FCA) and had conducted a review of lending practices. He said the need for change at Wonga was “real and urgent”, and new stricter lending criteria would mean “accepting far fewer applications from new and existing customers”.
“We want to ensure we only lend to those who can reasonably afford the loan in question and during my review, it became clear to me that this has unfortunately not always been the case,” he said. Clive Adamson, director of supervision at the FCA echoed this sentiment.
In a statement, the FCA said Wonga’s changes were as a result of a “voluntary agreement” between the lender and regulator.
Wonga’s second fine in 3 months.
In June, Wonga admitted sending customer’s fake letters about their arrears, from non-existent law firms, a clear attempt to scare customers into repayments. As a result it agreed to pay £2.6m in compensation.
• For any Harrington Brooks customer affected by this, we advise you to await contact from Wonga before you take any action.
• Wonga and the FCA have announced that they will be proactively contacting all customers affected by 10 October to notify them if they will be included in the redress programme.
• Continue to make payments unless you are told to stop by Wonga and Harrington Brooks.
• Borrowers who are experiencing financial difficulty, should contact Wonga to discuss their options.