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Wonga not on list of potential investments, says Welby

Payday lender Wonga would not be on a list of potential Church of England investments despite undergoing a number of reforms, Archbishop of Canterbury Justin Welby has said.

The Church of England's investment in Wonga, which has since ended, attracted criticism last year, and the Archbishop has since said he hoped to compete the company "out of existence" by supporting credit unions.

He told ITV News Business Editor Joel Hills that though new rules had made payday lending "more legitimate than it was", they still represented a very expensive way to borrow money.

Wonga ad banned for not disclosing relevant cost of borrowing

An advert for payday lender Wonga has been banned for failing to disclose the relevant cost of borrowing.

The television ad showed a man anxiously jotting down figures on a napkin before looking at his phone calculator and seeing the amount of £153.79.

Wonga has had one of its adverts banned. Credit: Wonga

An elderly lady than said: "You appear to be in a financial quandary, young fellow. At Wonga you choose exactly how much to borrow and for how long," and then adding: "You can even pay back early and save money."

The Citizens Advice Bureau complained the ad breached regulations by omitting the representative annual percentage rate (RAPR), as it understood that the claim "you can even pay back early and save money" was an incentive likely to trigger the requirement to disclose it.

The Advertising Standards Authority (ASA) ruled that the ad must not appear again in its current form. Last week Wonga announced it had written off £220 million of debt belonging to 330,000 customers after admitting making loans to people who could not afford to repay them.


Payday lenders 'have been missing affordability checks'

Wonga's admission that it lent to people who could not afford repayments is a "symptom of a wider problem" in the payday loans industry, the Citizens Advice Bureau has said.

Rachael Badger told ITV News said the CAB had been hearing that many companies were not properly checking whether customers could afford repayments.

Dramatic fall in customers 'rolling over' payday loans

The number of people "rolling over" their payday loans into a second month or more has reduced by three-quarters since tighter of the industry came into effect, an association representing the industry has said.

Many lenders allow customers to renew their borrowing month-on-month if they are unable to afford repayments - usually incurring extra costs.

Russell Hamblin-Boone, Chief Executive of the Consumer Finance Association, said Wonga's announcement of redress for thousands of customers who had fallen into arrears was representative of "the new lending landscape".

Tighter affordability checks from the Financial Conduct Authority had also meant a dramatic fall in the number of payday loans had been granted, he added.

Hamblin-Boone pointed out that a new "cost of credit cap" on the industry would control the prices of the loans, while further measures restricting the industry are due to be announced before the end of the year.


Archbishop welcomes Wonga debt write-off plans

Archbishop of Canterbury Justin Welby has welcomed Wonga's decision to write off the debts of 330,000 customers whose loans would not have been made under new affordability criteria.

Wonga writes off debts for 330,000 customers. Credit: PA

He said the move was an effort to put right some of the things that have gone wrong in the past and the finance industry should be "a good servant not a bad master". But the head of the Anglican Church said the major issue was to create a reformed financial system.

"The big issue is to create a financial system that gives access to the poor and hope for the poorest in our lands, to be able to flourish and develop and have proper access to finance, not just for loans but for savings. For lives in which finance is a good servant, not a bad master."

– Archbishop of Canterbury Justin Welby
  1. Chris Choi

Payday lenders could slip away as watchdog bares teeth

Wonga has accepted it lent to people who could not afford repayments. Credit: PA

If Wonga had found breaches in its lending process and taken the initiative in putting things right, they would deserve praise.

The truth seems to be different - behind the great "payday payback" is the Financial Conduct Authority, a powerful watchdog.

The FCA has new powers to regulate the payday sector and what we are seeing today is just the start.

Insiders at the Authority tell me - and I think they are correct - that many lenders are likely to simply leave the market between now and January - either because they cannot or will not apply new rules on checking customers ability to repay.

Wonga to contact all customers over redress scheme

Wonga will contact all its customers by the end of next week to inform them if they will be among the 375,000 to be included in the redress programme announced today.

ITV News Consumer Editor Chris Choi reports:

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