Friday 3 October 2014

Wonga Sees Profits More Than Halve


Profits at payday lender Wonga have fallen by more than half, the company has announced.

In the year to the end of December 2013, profits fell by 53% to £39.7m.

The company blamed “remediation costs” – money it had to pay back to customers as a result of its own mistakes.

Wonga also say that they expect to be “smaller and less profitable” in future, in part due to new controls set by the regulator, the Financial Conduct Authority (FCA).

Since July 2014, all payday loan companies have had to conform to new rules, which limit roll-overs of loans and force them to increase affordability checks. From January 2015, they will also have their charges capped.

In June this year, the FCA ordered Wonga to pay £2.6m in compensation to 45,000 customers, after fake letters were sent out from non-existent law firms.

At the same time Wonga was told to compensate 200,000 customers who were overcharged, as the result of a technical issue.

In total costing the company £18.8m.


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