Update: on 26 February the FCA announced that Wageday Advance has gone into administration. See Wageday Advance (WDA) goes under – pre pack sale to Morses Club for details.
The UK payday lender Wageday Advance (WDA) is currently not lending, as its website has been down for at least three days as of 22/02/19. It is blaming technical problems:
We’re experiencing some technical issues with our site which means we aren’t able to process loan applications for new or returning customers at the moment. Please bear with us while we get up and running again.
Proposed Scheme of Arrangement
Wageday Advance is owned by the American payday lender Curo. Curo announced on 31st January that it has asked the FCA to approve a Scheme of Arrangement.
This would cap its liability to pay compensation for unaffordable lending at c. £18million and allow Wageday Advance to carry on in business as a payday lender in Britain. The Scheme also has to be approved by Curo’s bondholders. Curo’s share price on the New York Stock Exchange has fallen by more than 10% since the announcement.
See my article Wageday Advance proposes cutting the refunds for more details.
Waiting for the FCA decision
Curo is hoping to get a decision from the FCA before the end of February. If the Scheme is not approved it will consider its options for the UK business, including selling it or insolvency.
The FCA decision will affect the Wageday Advance customers who have already submitted claims for payday loan refunds and the thousands of potential complainants.
The large and mid-size UK payday lenders will also be interested in the FCA’s decision as they are all facing large numbers of compensation claims. These include:
- QuickQuid, who has several thousand complaints about loans that are more than six years old currently with the Financial Ombudsman;
- Instant Cash Loans – the group which includes the Payday UK, Payday Express and Money Shop brands. It had been settling complaints for loans over six years old, but recently its complaint handling timescales have got longer and it seems to be rejecting more old loan complaints;
- Lending Stream who has been trying to restrict the numbers of complaints by not allowing customers to complain by email.
If the FCA allows Wageday Advance to restrict its liability to pay compensation but still carry on lending, is that fair to its competitors?
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