It's now a few weeks since Wonga went into administration. This seems like a good point to ask some difficult questions about the lessons from Wonga and what should be done to reduce consumer harm in future. Much of the media coverage has gone as follows: Wonga was the worst - then the FCA fined them and made them write off debts in 2014 and introduced good payday loan regulation in 2015. … [Read more...]
Debt policy & news
Debt Camel articles on what's changing and what ought to change in the world of personal debt in Britain.
For my weekly round-ups of debt and poverty news items, see Weekly News Summaries.
QuickQuid complaints triple – now more than Barclays or Wonga
Today's statistics from the Finanical Ombudsman show how the number of payday loan complaints has jumped in the last 6 months: complaint numbers for QuickQuid have tripled since the last half of 2017 Wonga's complaints nearly doubled, forcing it to go into administration at the end of August other payday lenders such as Lending Stream, Sunny and Payday UK have also seen numbers of … [Read more...]
Adding Liability Orders to credit records – a bad idea!
County Court Judgments (CCJs) are added to people's credit records, so why shouldn't the same be done for Liability Orders (LOs) for council tax arrears? This is a really bad idea, involving major problems and costs for local authorities and magistrates courts. These would massively outweigh the potential benefits. Magistrates Court Liability Order processes are not comparable to County Court … [Read more...]
Wonga refunds if you still have a loan – the “right of set-off”
Wonga's administrators have said it is highly unlikely customers will get the full amount of an agreed refund. Customers who have complained about unaffordable loans and had a refund agreed are now anxiously waiting to know how much they will get back. But people who owe Wonga money should be in a better position to get compensation than customers whose loans have been settled because of the … [Read more...]
Why the FSCS doesn’t cover Wonga and other payday lenders
With the news today that Wonga has stopped making new loans, customers are worried they won't get a refund if Wonga goes under. One optimistic question keeps being asked: isn't there some kind of guarantee system that would step in if Wonga fails? In the UK, the Financial Services Compensation Scheme (FSCS) provides a safety net, for example if your bank fails the money you have in a … [Read more...]
Wonga reported to be about to call in the administrators
Update - 30 August - Wonga has gone into administration. On 26 August Sky News reported that: Directors of the payday lender Wonga could appoint Grant Thornton as the company's administrator within days, Sky News learns. This comes three weeks after the story, also broken by Sky News, that Wonga has been forced to borrow an additional £10 million from its investors because of the rising cost … [Read more...]
FCA’s consultation on home-collected credit, catalogue credit & store cards
This article has my proposed responses to some of the FCA's questions in its Consultation on High Cost Credit 18/12. I'll be sending them in next week. (My comments on the two FCA questions with an earlier deadline are here: Introducing a cap on the cost of Rent To Own lenders such as Brighthouse.) Rent to own Q3: Do you agree with our proposals for a point of sale ban on extended … [Read more...]
The Money Shop stops lending
On 1st August 2018, the Money Shop stopped giving loans to new or existing customers. Here is the announcement on its website: The Money Shop is part of the Dollar Financial group, who owned two other large payday lending brands, Payday UK and Payday Express. These both stopped lending in October 2017. The Money Shop is not going out of business, it is carrying on with its other travel … [Read more...]
Payday loan refunds push Wonga to brink of insolvency
Update: 30 August - Wonga is now in administration. 26 August - new reports that Wonga is about to go into administration. Sky News reported on Saturday August 4th 2018 that Wonga has received an emergency £10million cash injection to save it from insolvency. The latest fundraising is said to value the company at only $30m. Sky reports that Wonga's CEO, Tara Kneafsey, told … [Read more...]
Current debt-related consultations eg from FCA
There are often a lot of consultations underway that are related to debt or debt advice matters. Few people in the debt advice world have time to respond to them all, but here is my list of the interesting ones, in order of the Closing Date. If I have missed one, leave a comment below! Of course inputs to consultations are frequently ignored and the government department does exactly what it … [Read more...]
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