The Payday lender Wonga has agreed to write off the debts of 330,000 customers after talks with regulators prompted it to put in place new affordability checks.
Any customer whose loan would not have been approved under the new checks will have this written off and a further 45,000 customers will not have to pay interest on their loans. Customers that meet the criteria will be contacted by 10th October.
New chairman Andy Haste, who described the need for change as “real and urgent”, made the announcement following discussion with the Financial Conduct Authority and an internal review of lending practices. In future, he added, Wonga would be “accepting far fewer applications from new and existing customers“.
“We want to ensure we only lend to those who can reasonably afford the loan in question and during my review, it became clear to me that this has unfortunately not always been the case,” he said.
“I agreed with the concerns expressed by the FCA and as a consequence of our discussions we have committed to taking these actions.”
The FCA hopes that other lenders will follow suit. “This should put the rest of the industry on notice,” commented Clive Adamson, director of supervision at the FCA. “They need to lend affordably and responsibly.”
However, not everyone is impressed. MP Pat McFadden, a member of the Treasury Committee, believes that Wonga bosses should be brought before his committee for questioning.
“By not doing proper credit checks, Wonga looks to have built a business on rolling over loans and building up debt for many people who could never afford to repay in the first place,” McFadden, told the BBC. “The effect on consumers has been to build up debts at astronomical rates of interest.”
The US money market fund reforms came into effect in 2016 and are already dramatically shaping US fund industry with investors flooding out of prime funds and into government securities. While the reforms are similar, they are not the same. GTNews interviews Yeng Bulter, global head of the cash business at State Street Global Advisors on the differences.
As the May 25 deadline for Europe’s General Data Protection Regulation (GDPR) inches closer, many treasurers are being lumped with the task of ensuring their wider company is compliant.
APIs may be a solution to MT940 challenges, says Karen Fagan, treasury operation manager, for British television company, ITV.
#PSD2FinishLine recently started trending on Twitter. As the country slowly grows in excitement throughout the month of November, with the C-word on ... read more