Borrowers sold unaffordable loans by Wonga will find out in days how much compensation they will get
- Wonga went into administration in August 2018
- Between April and August 2019 it received 390,000 successful complaints
- Those due payouts after being sold unaffordable loans were told they would find out how much they will get at the end of January 2020
Almost 390,000 people who successfully complained about unaffordable loans from collapsed payday lender Wonga will soon find out their compensation.
However, those affected could get back just 10 per cent of what they’re owed.
Those who made complaints to Wonga’s administrators Grant Thornton were emailed earlier this month double checking they had given them the right bank details.
They were also told the amount they would receive would be communicated ‘at the end of January’, according to the website Debt Camel.
Grant Thornton confirmed to This is Money this morning that how much people would get back ‘will be declared by the end of the month’, meaning complainants should find out in the next few days.
Payday lender Wonga collapsed into administration at the end of August 2018
According to the latest administrators’ report from last October, between April and August 2019, 560,982 complaints were made about unaffordable loans issued by Wonga. Of them, 389,621 were successful and the complainants eligible for redress.
The total redress, which took into account the interest and fees borrowers paid on unaffordable loans plus 8 per cent compensatory interest, stood at £460.2million, with the average claim £1,181.
However, complainants could get back less than 10 per cent, with the administrators reporting the provision set aside for ‘redress creditors’ – those sold unaffordable loans – was £45million.
The administrators stated: ‘The total value of all accepted claims received to date is in excess of £460million and will significantly exceed the money available to be shared out. As such, any distribution to creditors will be considerably smaller than the accepted claim amount.
‘The money available to be shared out will not be known until all of Wonga’s assets have been sold or realised and certain costs and deductions have been taken into account.’
The latest report in October didn’t include complaints received throughout September, the last month during which Grant Thornton’s complaints portal was open, meaning the number of people owed compensation is likely even higher.
Wonga has brought down by a deluge of mis-selling complaints and fell into administration at the end of August 2018, with more than 40,000 outstanding complaints at the time it went bust.
Last October it was followed into administration by fellow payday lender QuickQuid, which according to the Financial Ombudsman Service received 10,400 complaints in 2018.
In 2018-19 the number of complaints about payday loans made to the FOS rose 130 per cent compared to the year before, with nearly 40,000 new complaints made about the short-term high-cost loans.