Wonga customers seeking compensation for mis-sold loans have started revealing the extent of their losses, after discovering they’ll receive just 4.3 percent of their claims.
Customers who took out a loan with the payday lender before its collapse fired off letters of redress to Wonga’s administrators, Grant Thornton, claiming they’d been given unaffordable loans. Many claimed they were unable to repay without falling behind on household bills or having to borrow more.
The full redress former customers were seeking would have comprised a refund of the interest and charges on the loan, plus eight percent of statutory interest. They will now get just 4.3 percent of the total value they’d claimed for.
"Wonga owe me £2,354! Imagine if I owed them that! Would it be ok to pay them less than 200 quid back? It’s disgusting"
One Twitter user, Ian Brady (@ianbrad04), who stood to receive just £175 from an initial compensation claim of £4,080, posted: “4.3 percent is a kick in the teeth but don’t think there is anything we can do about it.”
Another Twitter user, @sineadreanne, said: “Wonga owe me £2,354! Imagine if I owed them that! Would it be ok to pay them less than 200 quid back? It’s disgusting.”
By the autumn of 2019, indications had begun to emerge that claimants would be receiving a fraction of what they’d claimed for.
By September, the administrators had received around 360,000 claims for refunds with a total value of around £460m, which have since been assessed.
Now that Grant Thornton have addressed the secured creditor claims in the administration, they have provided another update on the distribution of assets to repay the customers’ claims.
A spokesperson for Grant Thornton UK said: “The joint administrators have begun issuing correspondence to all unsecured creditors, including the 358,129 eligible redress claimants, informing them of the final dividend payment they can expect from the estate.
“The final payment, amounting to 4.3 percent of agreed claims against the Wonga estate, will be made over the coming weeks via bank transfer or cheque.
“As the joint administrators have explained throughout the course of the administration, the final dividend payment is significantly smaller than accepted claim values, owing to the fact that the total value of all accepted claims significantly exceeded the money available to be shared out.”
The fates and prospects for other alternative lenders still operating in the UK will be discussed at the Credit Summit in London on March 19, sponsored by Experian, where executives at Mr Lender, Lending Works, Elevate Credit, Moneybarn, OakBrook Finance and Klarna will speak on panels and individual slots. These and other lenders will appear on the Alternative Lending stage, sponsored by the debt purchaser Lantern.