Wonga gone wrong – your questions answered including what happens to claims now
The company that made a living out of lending to people who could never pay it back has collapsed – here, Dean Dunham answers your questions
Back in 2013 I carried out an investigation about Wonga, the pay day loan company which included interviewing one of the bosses of the lending firm.
Some of my findings were astonishing but they did agree to clean up their act following this.
And I was delighted when they did indeed make some positive changes but unfortunately, these changes did not go far enough as they continued to charge extortionate interest rates and lend to those that really could not afford to be taking out a loan.
I was therefore not too unhappy to hear the news this week that Wonga had been put into administration hopefully meaning that this is one brand of pay day lender that will soon disappear.
I’m also hopeful that others will follow as one thing is clear, this type of lending is not good for those in financial trouble.
If you’re a Wonga customer here’s what you need to know.
1. What does it mean to be in administration?
When a company enters administration it means that control of that company is passed to an appointed administrator.
The administrators primary goal is to leverage the company’s assets and business to repay creditors as quickly and as fully as possible. So, during this process the company continues to operate.
However, unless a buyer for the company is located, it is normal for the company to then go into liquidation and effectively disappear.
2. Why did Wonga go into administration?
Wonga has reported that the primary reason has been due to increasing customer claims for compensation over mis-sold loans.
3. I have a claim, should I still pursue it?
Yes, especially if you still owe money to Wonga. If you feel you have a claim write to their administrators quickly and if they reject your claim or fail to respond within eight weeks, lodge a complaint with the free Financial Ombudsman Service.
Here’s how to make your compensation claim.
4. Do I need to continue to pay my loan?
Unfortunately yes you do. Grant Thornton, who have been appointed as the administrators will be managing all loan repayments, which will include chasing those that do not pay.
However, if you feel that were mis-sold the loan in any way or can prove that you couldn’t afford to take out the loan at the time you borrowed it, you may have a claim.
If this is the case, you may be entitled to compensation and could make a claim to the administrators and suggest that the compensation is offset against monies you owe.
News Source: Dean Dunham, Mirror
