Wonga was a UK-based payday loan company that was one of the largest lenders in the industry. It was founded in 2007 and quickly gained popularity due to its online platform and fast loan processing times. Wonga offered short-term loans to borrowers with poor credit histories and charged high interest rates, often exceeding 1,000% APR.
However, Wonga faced criticism and regulatory action over its business practices. In 2014, the company was ordered by the UK’s Financial Conduct Authority (FCA) to pay £2.6 million in compensation to 45,000 customers for unfair and misleading debt collection practices. In 2018, Wonga collapsed and went into administration after facing a surge of compensation claims from customers who had been mis-sold loans.
Wonga’s collapse led to calls for greater regulation of the payday loan industry, and the FCA introduced stricter rules to protect consumers. Today, payday loan companies in the UK are required to conduct affordability checks, limit the number of times a loan can be rolled over, and cap interest rates and fees.
The collapse of Wonga was attributed to the number of compensation claims made by customers who had been mis-sold loans, which had put significant financial strain on the company. Wonga’s administration marked the end of one of the largest payday loan companies in the UK.
The collapse of Wonga highlights the need for increased regulation and scrutiny of the payday loan industry. Payday loans are a controversial and high-cost form of borrowing that can trap vulnerable consumers in cycles of debt. In recent years, the FCA has introduced stricter rules to protect consumers, including affordability checks, interest rate and fee caps, and limits on the number of times loans can be rolled over.
While the collapse of Wonga was a significant event in the payday loan industry, it also serves as a cautionary tale for borrowers. It is important to carefully review the terms and conditions of any loan agreement, understand the interest rates and fees, and consider all other options before taking out a payday loan. Additionally, borrowers should seek advice from a debt charity or financial advisor if they are struggling with debt.
Wonga Head Office Address
Wonga went into administration and any subsequent correspondence is handled by Grant Thornton.
Grant Thornton UK LLP,
4 Hardman Square,