Live updates

  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:

Advertisement

Wonga writes off £220 million of debt

Pay-day lender Wonga will write off £220 million owed to it, but the company will only feel the loss of £35 million as the rest is interest on the debts of the 330,000 customers.

Wonga admits lending to those who could not afford it

Wonga's new chairman has admitted the company made loans to people who could not afford to repay.

The statement comes after the payday lender's agreed with the financial watchdog to make significant and immediate changes to its business.

Wonga has written off the debts of 330,000 customers. Credit: PA Wire

Debts for 330,000 customers currently in arrears of more than 30 days will have their loans written off, while 45,000 who are up to 29 days in arrears will be asked to repay without interest and charges over an extended period of four months.

Chairman Andy Haste said: "We want to ensure we only lend to those who can reasonably afford the loan in question and during my review, it became clear to me that this has unfortunately not always been the case.

"I agreed with the concerns expressed by the FCA and as a consequence of our discussions we have committed to taking these actions."

Wonga profits hit by £18 million fake letter scandal

Profits at payday lender Wonga more than halved in 2013 because the company was forced to pay £18.8 million in costs over a scandal involving fake legal letters.

Wonga expects to be 'smaller and less profitable' in the near term. Credit: PA Wire

In June, Wonga was forced to pay compensation by the Financial Conduct Authority (FCA) after sending legal letters from fake law firms to 45,000 customers.

The payday lender was found guilty of "unfair and misleading debt collection practices".

A 56% rise in operating costs due to investment in staff, infrastructure and its international businesses also contributed to the fall in profits.

Advertisement

Wonga name new chairman after fake letter scandal

The new chairman of payday lender Wonga has pledged "significant change" after the firm "made mistakes" in sending out letters from fake lawyers to customers in arrears.

ITV News Business Editor Joel Hills confirmed the appointment, tweeting:

Church of England 'took a year' to sever Wonga ties

ITV News Consumer Editor Chris Choi reports:

Load more updates