On 10 January 202, the Wonga administrators started sending emails to some people who will be getting a refund to encourage them to check Wonga has the right bank account details to pay them:
We previously emailed you in relation to your successful claim in the Wonga administration. At the end of January, we will communicate by email the amount you will be due to receive as a dividend.
Please be aware, the payment you receive will be considerably smaller than your accepted claim value.
We will make an electronic payment (bank transfer) to your bank account. The account number we have on file for you ends with these 4 digits: 9999.
If these 4 digits are correct, there is no need for you to do anything.
If these 4 digits are incorrect, please contact us immediately by sending an email to email@example.com . We will reply to you with a secure link to upload your new details. Don’t forget to include your full name, date of birth and claim case number.
It is your responsibility to update your bank details if they are not correct.
Kind regards, The Joint Administrators
- There is no indication that they are going to be delaying payments beyond the end of January.
- It does NOT say what % you will get.
- Anyone saying what they think will be paid is just guessing or repeating something they read in a newspaper months ago.
- I am deleting comments left by people saying they think they will get 2p or they hope to get 15%. They aren’t helpful, no one knows at the moment!
What is an affordability complaint?
A payday loan is “unaffordable” if repaying meant you had to get into more debt, by borrowing again or getting behind on bills or other debts. So you may have repaid all your loans but still have a good claim for a refund of the interest you paid.
If you borrowed from other payday lenders, read How to complain to a payday lender.
The deadline for making these claims to the Administrators has passed.
How many people had a claim against Wonga?
When Wonga went under:
- there were over 200,000 people with current loans from Wonga – many of them had a good case for the interest to be removed from their balance so they only repay what they borrowed;
- there were 24,000 affordability complaints awaiting a decision by Wonga and 9,500 complaints against Wonga with the Financial Ombudsman;
- by end February 2019, the number of complaints had increased to 49,000
- at end August the number of complaints had gone up to 560,000, with 389,000 of these having a valid claim.
I said in March that there would be more than 100,000 people with complaints – I was clearly correct!
Why won’t you get paid the full amount?
There will not be enough to pay the calculated refunds in full, so people will get a percentage of it.
This is often described as getting so many pence in the pound back eg “getting 12p in the pound”.
At the moment we don’t know what percentage will be paid. This will depend on things such as how much Wonga’s foreign operations can be sold for, how many people submitted complaints before the deadline and how much the calculated refunds on these complaints add up to.
There is no help for Wonga customers from the FSCS, see Why the FSCS does not cover payday lenders for details.
What has happened in Administration so far
Wonga stopped lending and went into administration on 30 August 2018, unable to pay refunds on all the payday loan affordability complaints it was getting.
The Administrators have made various progress reports (available from Companies House) and statements during 2018-19:
- in October 2018, the Administrators published their Proposals, detailing how they planned to handle the administration. Creditors voted to approve these Proposals.
- progress report to end February 2019;
- Witness Statement in April 2019;
- progress report to end August 2019.
An online claim page was set up in April 2019 for Wonga customers to submit claims for refunds. The deadline for sending in a claim was 30 September.
The Administrators assessed all claims using an automated tool. This took account of:
- all loans, including those over 6 years old
- how large a loan was compared to a customer’s income;
- how often someone borrowed without significant gaps;
- whether there were indications of hardship such as missed payments;
- if there is a balance outstanding for the right of set-off.
Where it decided one or more loans were unaffordable, it calculated how much interest should be refunded and added statutory interest at 8%.
In August 2019 the Administrators starting sending emails to people saying whether their claims have been successful or rejected. If your claim is successful you will have been told what the refund value has been assessed at. But you will only receive a small percentage of this.
In September, the Administrators sent an update on progress up to end August 2019. Key points include:
- at end August, 389,621 claims for unaffordable payday lending have been accepted by the administrators;
- the total value of these claims is c £460million – an average of c £1,200 a claim. (My comment: £460m is a lot more than the £45million which the Wonga directors had estimated);
- £23m of outstanding loans have been collected. The Administrators say that outstanding loans are being taken into account and given the right of set-off where the customer has a claim for unaffordable loans. The remaining loan book will not be sold to a debt collector.
The Administrators expect that payments will be made by 30 January 2020.
Some people still owe Wonga money. At the moment it is not known what will happen to these balances as the Administrators are no longer taking payments and have said before that they are not likely to sell the loans to a debt collector.
On 10 January the Administrators sent out confirmation emails with people’s bank accounts.
Check out the comments at the bottom of this article where readers report on what is happening to their Wonga complaints and refunds.