MSE News

MPs say 10,000+ Wonga customers have 'fallen through the cracks'

Government intervention may be needed to stop defunct payday lender Wonga "damaging people from beyond the grave", MP Nicky Morgan has said.

Nicky Morgan, who chairs the powerful Treasury Committee – a cross-party group of MPs – has written to Grant Thornton, Wonga's administrator, about the 10,500 people who had complaints open with the Financial Ombudsman Service (FOS) when the firm went bust last year.

But Caroline Wayman, chief ombudsman at the FOS, told the Treasury Committee last month that those who had made complaints would not be able to have their issues resolved.

And the Financial Services Compensation Scheme (FSCS) will not be an avenue for customers to get cash back as high-cost short-term credit firms are not covered by the scheme.

Wonga collapsed in August after it was hit by a surge in people making mis-selling compensation claims on their loans.

'If Wonga continues to damage people's finances from beyond the grave, it may be time to intervene'

Morgan said customers have been "cast aside" with no regulatory authority taking responsibility to deal with the complaints, and opened up the possibility of Government intervention.

She said: "It cannot be right that over 10,000 people who may have been mis-sold loans are just cast aside, especially as many will be vulnerable consumers.

"These people have been left to fend for themselves by Wonga, the FCA and the FOS. They've been allowed to fall thought the cracks with nobody taking responsibility for their mistreatment.

"I have written to Grant Thornton, Wonga's administrators, to understand how they intend to progress outstanding complaints against Wonga. If Wonga continues to damage people's finances from beyond the grave, it may be time for the Government to intervene."

How difficult is it to claim for mis-selling?

Grant Thornton has previously said that customers with mis-selling claims should contact it.

But if you do, you'll likely be dealt with as an 'unsecured creditor'.

In this situation don't expect to get much back, as there's a long list of people owed money when companies go into administration and customers are rarely anywhere near the top priority.

What do the administrators say?

A representative from Grant Thornton said: "The administrators are continuing to conduct an orderly wind-down of the business in accordance with their statutory obligations, supporting customers where possible during this period, and are developing a methodology for adjudicating claims in a fair and reasonable way in the circumstances of the administration.

"Our aim is to treat claims fairly and efficiently, and to maximise the assets we receive in order to best compensate creditors, including claimants.

"We monitor those customers who may be vulnerable – including financial difficulty, financial hardship and health and wellbeing – and are working to ensure appropriate support for these people."

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