Thousands of customers who took loans with controversial pay day lender Wonga are to have their debts written off, in an action expected to cost the ‘legal loan shark’ more than 200 million pounds.
The company will wipe the debts of 330,000 customers who are trapped in arrears of 30 days or more, while a further 45,000 customers will get to repay their loans exempt from interest.
The move is a “consequence” of Wonga’s discussions with the Financial Conduct Authority (FCA), who said the firm “was not taking adequate steps to assess customers’ ability to meet repayments in a sustainable manner.”
The FCA also said that Wonga did not do enough to vet customers and their ability to pay back the interest incurred on loans, which can be higher than 5,000 percent.
As a result, a large number of Wonga customers were forced to admit they were unable to pay the company back after taking out a short-term loan.