This week, [April 26th, 2014] The Financial Conduct Authority [FCA] ordered the payday loans company Wonga to pay £2.6m compensation to 45,000 customers after it sent threatening letters from non-existent companies
The figure could have been much higher, but the FCA had limited powers for events that occurred prior to its formation when it replaced its ineffective predecessor, The Office of Fair Trading in 2011. Consequently, Wonga is to compensate customers at a rate of 8%. Commentators point to the annualised rate it charges its debtors which could reach the 5,853% “representative” APR as quoted on its website.
To be continued
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October 2nd 2014
Wonga to pay back over 300,000 borrowers. Move seen as in anticipation of legal intervention.