New chairman promises change at under-fire Wonga

Andy Haste's appointment comes after Wonga paid £2.6 million in compensation over fake legal letters issued to customers in arrears. Photo: Rui Vieira/PA Wire

The new chairman of Wonga has arrived with what he calls "a mandate to deliver significant change".

Andy Haste has 30 years’ experience in financial services, including eight years as chief executive of the insurer RSA, which owns the More Than brand. Since leaving RSA he was linked with prominent roles at Aviva, TSB and RBS.

This morning Mr Haste told me that he was approached "several months ago" by Laurel Bowden, a board member at Greylock, one of Wonga's big investors.

Last month Wonga agreed to pay £2.6 million in compensation to 45,000 customers after it admitted sending them letters from fake law firms in an attempt to recover outstanding debt.

The company apologised and said the abuses ended nearly four years ago. The City of London Police are in the process of deciding whether to investigate.

Former RSA chief executive Andy Haste said he ran the rule over Wonga before deciding to take his position. Credit: PA Archive

Mr Haste says he was made aware of the "unacceptable collection practices" and that he thought "long and hard" before accepting the job.

He believes he knows everything there is to know about Wonga and its past behaviour, he's not expecting any nasty surprises and has taken the role on the promise that shareholders will back change. Mr Haste believes there is a demand for short-term responsible lending.

His plan, in brief: out go the puppet adverts (they strike the wrong tone and have led to accusations that the company is targeting children); the customer base is to be reviewed and lending criteria to be tightened (to ensure Wonga only lends to those who can afford to repay); greater transparency on the cost of loans; better technology and closer cooperation with the regulator to ensure customers are "at the heart of everything Wonga does".

Mr Haste's explanation for past abuses is that Wonga grew too fast and made mistakes. The price of change is that the company will be "a smaller and less profitable business" going forward. The timing of this push for respectability is significant.

Later this week the Financial Conduct Authority will set a cap on the amount of money payday lenders are allowed to charge their customers. The regulator is also about to start the process of assessing whether the current lenders should be allowed to continue to trade.

Mr Haste would not engage with questions about whether the Wonga he has inherited would pass muster. You might reasonably speculate it would struggle.