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Wonga customers have been cast aside, MPs say | Business News

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MPs are calling for government intervention as thousands of Wonga customers seeking compensation from the collapsed payday lender have been left in financial limbo because their cases fall outside of regulation.

Around 10,500 people had complaints open with the Financial Ombudsman Service (FOS) when the Wonga went bust last year.

But MPs have been told by FOS chief ombudsman Caroline Wayman, that those customers will not be entitled to compensation or having their complaints resolved because high-cost short term credit firms like Wonga are not covered by the Financial Services Compensation Scheme (FSCS).

Directed by the Financial Conduct Authority (FCA), Treasury select committee chair Nicky Morgan MP has contacted Wonga’s administrator, Grant Thornton to address the customers’ complaints and eventual compensation.

The FCA decided in 2016 to exclude high-cost short term credit companies from FSCS.

Writing to Grant Thornton chief executive David Dunkley, Mrs Morgan said: “As some of these consumers are vulnerable, I would be interested to understand how you are dealing with the volume of complaints and how you are assessing their claims for compensation against Wonga?”

She also asked how quickly the administrator was dealing with the complaints and how many had been assessed so far, requesting the company’s response by March 7.

Mrs Morgan said customers had been “cast aside” with no regulatory authority taking responsibility to deal with the complaints, and opened up the possibility of Government intervention.

Nicky Morgan
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Nicky Morgan MP said Wonga customers were ‘cast aside’ with no regulators taking responsibility

“It cannot be right that over 10,000 people who may have been missold loans are just cast aside, especially as many will be vulnerable consumers.

“These people have been left to fend for themselves by Wonga, the FCA and the FOS.

“They’ve been allowed to fall thought the cracks with nobody taking responsibility for their mistreatment.

“If Wonga continues to damage people’s finances from beyond the grave, it may be time for the Government to intervene.”

Grant Thornton said: “The administrators are continuing to conduct an orderly wind-down of the business in accordance with their statutory obligations, supporting customers where possible during this period, and are developing a methodology for adjudicating claims in a fair and reasonable way in the circumstances of the administration.

“Our aim is to treat claims fairly and efficiently, and to maximise the assets we receive in order to best compensate creditors, including claimants.

“We monitor those customers who may be vulnerable – including financial difficulty, financial hardship and health and well-being – and are working to ensure appropriate support for these people.”

Wonga collapsed in August, after it was hit by a surge in compensation claims over past loans.

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