“Wonga, the UK’s biggest payday lender, has entered an agreement with the Financial conduct Authority (FCA) which will see it pay compensation of over £2.6m to around 45,000 customers for unfair and misleading debt collection practices.”
Wonga was founded in 2007 by Errol Damelin. As Damelin told the story, Wonga’s original goal was to “disrupt the short-term credit industry by providing transparency, exact control of amount and payment date, immediate access to funds, and no faxing or emailing documents.”
Obviously, Wonga’s management has strayed FAR from this mantra. These guys are bringing a tremendous amount of heat on the payday loan industry. Only a fool would send collection letters that appear to be from lawyers to borrowers. This craziness harkens back to the dark ages of the industry.
Now, Wonga owes 45,000+ customers cash. If this wasn’t enough, in April 2014, Wonga reported to the FCA that it had “discovered system errors relating to the calculation of the amount owing on customer accounts where fees, balance adjustments or the timing used to calculate interest were not consistently applied.”
This reminds me of my AT & T bill. Every month they make a billing mistake. Every mistake is in their favor. Every month I must call them for a correction. And every month I tell myself I’m going to change providers.
Finally, the FCA says, “Customers do not need to take any action: Wonga will be contacting those that have been affected by these issues shortly.”
Give me a break! If you borrowed from Wonga, GET ON THE PHONE!
Here’s the original FCA Press Release: Wonga to pay redress for unfair debt collection practices