Payday lender Wonga has double-charged up to 7,000 customers following a technical glitch, leaving some unable to pay their bills – but while the firm will provide refunds and pay costs incurred by those left out of pocket, it won't commit to paying borrowers interest on the money which was wrongly taken.
The issue began on Friday (30 September), when customers started receiving texts from Wonga warning them they may have been charged incorrectly on their loan repayments. On looking at their bank accounts, they found their normal payments had been taken twice.
Those who phoned the firm's customer line then heard an automated message confirming the problem: "We apologise for a possible incorrect deduction on your Wonga loan. We have corrected the issue and refunds are being returned to your bank."
However, refunds can take several days to arrive in customers' accounts, leaving many short of funds at the start of the month, when most direct debits for bills, mortgages and rent payments are traditionally scheduled.
'I can't pay my monthly bills'
Wonga customer Jackie Hayward, 54, from London, had £1,300 taken out of her account on Friday instead of her usual £650 payment. When phoning the company she was told between 6,000 and 7,000 customers had been overcharged because of a technical problem.
The next day she received another text saying the refund had been sent, but when she checked her account it wasn't there. In desperation and with 12 direct debits due today (Monday 3 October) for a variety of household bills, charity worker Jackie felt she had no choice but to turn to a different payday loan company over the weekend. As of this morning, her Wonga refund still hasn't arrived.
Jackie told us: "Over 48 hours later [Wonga] have not paid it back. In my case over £650 had been taken by their error and I can't pay my monthly bills."
Early on Friday Wonga experienced an 'internal system error' which meant payments on its 'Flexi Loan' products scheduled to be taken that day were debited twice. That meant 6,000 to 7,000 people were double-charged.
Refunds started to be processed later that day, and Wonga is today following up with banks to find out when these are likely to arrive in customers' accounts.
I've been affected – can I get compensation?
Wonga told us it would refund any extra costs incurred by customers if the error left them short of funds (see below for a list of costs you might face in this situation).
If you've been left out of pocket by this error, it's vital you keep records, such as bank statements, receipts, screenshots and photos, of any additional fees you may have been charged so you can ask Wonga if it will refund them.
Fees you could have been charged include:
- Costs for racking up lengthy phone calls to discuss the problem with Wonga.
- Fees from companies or third parties if they've not received a payment from you on time.
- Interest you've racked up through having to use a credit card, overdraft or additional loan.
Like most payday loans, the typical annual percentage rate (APR) on a Flexi Loan is eye-wateringly high – for example, if you borrowed £300 over three months, the representative APR would be 1,261%.
However, the company has no specific plans to pay interest on the payments it wrongly took, or to compensate more widely for the inconvenience caused.
It told us that requests for compensation and interest would be considered on a case-by-case basis.
What does Wonga say?
A Wonga spokesperson says: "We experienced an internal system error on Friday morning which resulted in Flexi Loan payments being debited twice from some customers. We notified all those affected and took action to credit the right amounts back to customers on Friday. We apologise for the inconvenience caused."
What does the Financial Conduct Authority say?
When asked about the rights of affected Wonga customers, an FCA spokesperson said: “The FCA is aware of this issue and we are in contact with the firm.
"We expect firms to treat customers fairly at all times and address any instances where customers have suffered detriment.”