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You can find the current article at its original source at https://www.theguardian.com/business/2018/aug/28/if-payday-lender-wonga-collapses-what-will-it-mean-for-customers
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| Version 4 | Version 5 |
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| What does payday lender Wonga's collapse mean for customers? | What does payday lender Wonga's collapse mean for customers? |
| (about 1 month later) | |
| Britain’s biggest payday lender, Wonga, has collapsed into administration following a wave of customer compensation claims, leaving more than 200,000 customers wondering what it means for their loans. | Britain’s biggest payday lender, Wonga, has collapsed into administration following a wave of customer compensation claims, leaving more than 200,000 customers wondering what it means for their loans. |
| The short-term loan provider has hired the accountancy firm Grant Thornton to handle the administration. It will now seek to find a buyer for the company’s loan book. | The short-term loan provider has hired the accountancy firm Grant Thornton to handle the administration. It will now seek to find a buyer for the company’s loan book. |
| I won’t cheer if Wonga fails. I was grateful it was there for me | James Ball | I won’t cheer if Wonga fails. I was grateful it was there for me | James Ball |
| Customers have in recent days deluged the company’s helpline, where an automated message says there are delays in answering “because of a high volume of calls”. | Customers have in recent days deluged the company’s helpline, where an automated message says there are delays in answering “because of a high volume of calls”. |
| I have a Wonga loan. Should I keep making repayments? | I have a Wonga loan. Should I keep making repayments? |
| There are believed to be about 220,000 existing Wonga customers. It is not a stock market quoted company, so few figures are available, but its last set of figures – now nearly two years old – showed it had £430m lent out, with an average loan size of £237. | There are believed to be about 220,000 existing Wonga customers. It is not a stock market quoted company, so few figures are available, but its last set of figures – now nearly two years old – showed it had £430m lent out, with an average loan size of £237. |
| Even though Wonga has collapsed into administration, the legal obligation for customers to repay their debts remains unchanged. Those who do get through to the helpline are being told that if they fail to make a payment, their account will be passed to a debt recovery agency, with extra fees to pay. | Even though Wonga has collapsed into administration, the legal obligation for customers to repay their debts remains unchanged. Those who do get through to the helpline are being told that if they fail to make a payment, their account will be passed to a debt recovery agency, with extra fees to pay. |
| Wonga’s website points out: “The first time you miss a payment, you’ll have three days to repay before we charge you a missed payment fee of £15.” | Wonga’s website points out: “The first time you miss a payment, you’ll have three days to repay before we charge you a missed payment fee of £15.” |
| Wonga’s main assets are the loans it provides and Grant Thornton will look to sell these to another company. That company will then have the legal right to chase Wonga’s borrowers for the outstanding balance. | Wonga’s main assets are the loans it provides and Grant Thornton will look to sell these to another company. That company will then have the legal right to chase Wonga’s borrowers for the outstanding balance. |
| However, they do not have the right to change the terms and conditions of a loan – they cannot increase the interest or demand early repayment. But a buyer of Wonga’s existing loan book may take a more – or less – aggressive approach to debt recovery than Wonga. | However, they do not have the right to change the terms and conditions of a loan – they cannot increase the interest or demand early repayment. But a buyer of Wonga’s existing loan book may take a more – or less – aggressive approach to debt recovery than Wonga. |
| I have made a compensation claim against Wonga. What will happen now? | I have made a compensation claim against Wonga. What will happen now? |
| Until today, claims for compensation were either being settled by the company or passed on to the Financial Ombudsman Service (FOS). But now that Wonga is formally entering administration, compensation claimants will join the list of creditors. The claims management companies that have been pursuing Wonga reckon that means the chance of obtaining compensation will be next to zero. | Until today, claims for compensation were either being settled by the company or passed on to the Financial Ombudsman Service (FOS). But now that Wonga is formally entering administration, compensation claimants will join the list of creditors. The claims management companies that have been pursuing Wonga reckon that means the chance of obtaining compensation will be next to zero. |
| The FOS had warned that if Wonga went into administration it would not make any further assessments for compensation, and customers are not entitled to claim against the Financial Services Compensation Scheme. | The FOS had warned that if Wonga went into administration it would not make any further assessments for compensation, and customers are not entitled to claim against the Financial Services Compensation Scheme. |
| Are the regulators doing anything to organise an orderly exit for the business? | Are the regulators doing anything to organise an orderly exit for the business? |
| The Financial Conduct Authority has had urgent discussions with Wonga to ensure that customer rights are being taken into consideration. | The Financial Conduct Authority has had urgent discussions with Wonga to ensure that customer rights are being taken into consideration. |
| Why didn’t Wonga take out a 4,000% short-term loan to get it through its financial problems? | Why didn’t Wonga take out a 4,000% short-term loan to get it through its financial problems? |
| Twitter is alive with people making jokes at the company’s expense. “What’s the problem with Wonga? Did they lend themselves a fiver?” is typical. But others have spared a thought for the 500 workers at the company who face redundancy. | Twitter is alive with people making jokes at the company’s expense. “What’s the problem with Wonga? Did they lend themselves a fiver?” is typical. But others have spared a thought for the 500 workers at the company who face redundancy. |
| Wonga | Wonga |
| Payday loans | Payday loans |
| Borrowing & debt | Borrowing & debt |
| Consumer affairs | Consumer affairs |
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