The payday loan company Wonga went into administration last year. It officially stopped lending on 30th August, with the administrators taking over the servicing of loans, collection of payments, and the many compensation claims against the company.
Claims against Wonga for mis-sold, unaffordable loans are considered to be the main reason for the company’s collapse. So, with many consumers still waiting for payouts, how will this process be carried out?
The deadline for compensation claims was the 30th September. Following this, the administrators sent out the following key updates for creditors:
In April 2019, the administrators set up an online claim page in order to process as many claims as quickly as possible. These were submitted using an automated online tool and assessed according to the following criteria:
For upheld claims, the tool will automatically add statutory interest, which is 8%. At the moment, customers are being told, in batches, whether their claims are successful or rejected. Once all the claims are processed, the money will be paid out.
It is, however, expected that customers will only receive a fraction of what they’re owed – a recent report by the Guardian estimated it to be around 10% of the total value, or £118 on average out of a total of £1180.
When Wonga collapsed, there were over 200,000 with outstanding loans, as well as 24,000 affordability complaints awaiting a decision. By the end of February, this had increased to 49,000 and now it stands at over 560,000, 389,000 of which were upheld.
These consumers will now have to wait several months to find out how much compensation they will receive.
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It's the same the whole world over
Isn't life a bloomin shame
It's the rich wot gets the pay out
And the poor wot gets the blame