Tag: wonga

Wonga Runs of Cash

Wonga, the payday lender, well known for its wholesome adverts, but notorious for its extortionate interest rates has collapsed into administration after it was brought down by the weight of compensation claims.

 

Wonga used to charge up to 5,853% interest APR.

The collapse leaves an estimated 200,000 customers still owing more than £400m in short-term loans.

The Financial Conduct Authority said it will supervise Wonga and seek fair treatment for customers, but that customers should continue to make any outstanding payments in the normal way as all existing agreements remain in place and will not be affected by the proposed administration.

Wonga was at one time was planning a stock market flotation and looked to be worth up to £1 billion, but it was brought to collapse by a flood of compensation claims over their illegal treatment of customers. For example, Wonga wanted to send out reminder letters to customers who weren’t paying on time so they invented a Solicitors name and sent out threatening letters from the fake solicitor.  They seem to have believed they were above the law and could treat people anyway they wanted to.

They were ordered to pay compensation of £2.6m for those fake solicitors’ letters and recently the claims management companies got their teeth into Wonga with countless claims against them.

Wonga’s most recent accounts show a loss of £66.5m, but said costs and impairments were falling and that it remained a going concern. It said it had 220,000 customers and £430m in loans outstanding, figures.

Martin Lewis, the consumer champion, founder of MoneySavingExpert, said the firm’s collapse was a cause to celebration. “Normally when firms go bust, the fear is diminished competition. Not here. Wonga’s payday loans were the crack cocaine of debt – unneeded, unwanted, unhelpful, destructive and addictive. Its behaviour was immoral, from using pretend lawyers to threaten the vulnerable, to pumping its ads out on children’s TV.”

Good riddance to Wonga and everything it stood for.

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Wonga Data Breach

Wonga has announced that customer records including names, addresses and bank account details for up to 250,00 people may have been accessed by hackers.

Wonga said it was urgently investigating illegal and unauthorised access to the personal data of some of its customers in the UK and Poland.

Wonga realised last week there was a problem.  It alerted the authorities and started to contact borrowers on Saturday to make them aware of the problem.

Customers who are thought to have been affected have received a message from Wonga telling them: “We believe there may have been illegal and unauthorised access to some of your personal data on your Wonga.com account.”

The message said that Wonga was working to establish the full details and the data breached may include one or more of the following: name, email address, home address, phone number, the last four digits of your card number (but not the whole number) and/or your bank account number and sort code.

It also said that Wonga believes its  accounts and passwords have not been compromised, but customers were advised to look out for unusual activity across their accounts

Wonga has had a turbulent life since its start 11 years ago and has been trying to repair its reputation (currently considered to be an irresponsible lender). This data breach certainly won’t help and Wonga made pre-tax losses of £80.2 million in 2015.

In a statement, the firm said: “We are working closely with authorities and we are in the process of informing affected customers. We sincerely apologise for the inconvenience caused.”

Wonga also said it did not believe the attackers had gained access to users’ loan accounts, but warned them to be vigilant.

What Should Wonga Customers Do?

The payday lender has set up a help page for affected customers at https://www.wonga.com/help/incident-faq

It advises them to:

Alert their bank and ask them to look out for any suspicious activity. Wonga will also be informing financial institutions about the breach

Watch out for scammers or unusual online activity. In particular, customers are told to be cautious about cold calls and emails asking for personal information

Contact the Wonga helpline on 0207 138 8330 for further information

The Information Commissioner’s Office said: “All organisations have a responsibility to keep customers’ personal information secure. Where we find this has not happened, we can investigate and may take enforcement action.”

Wonga has a reported APR of over 1,500% – so no-one with another choice should consider paying that.

Are you affected by this?  – if so then let me know by email.