Simon Read: Signs at last of payday clean-up


Click to follow
The Independent Online

Britain's most profitable payday lender, Wonga, announced a new chairman this week. He's a former insurance chief who says he hopes to revive the firm's reputation.

Was it coincidence that the appointment came a day before payday lenders were warned that the City watchdog's new cap on the cost of credit would hit their profitability?

Wonga's owners are private equity investors who want to turn their investment into a decent profit. They must have been aghast at the storm of protest that erupted over the news late last month that Wonga had been sending vulnerable and frightened borrowers threatening letters from made-up lawyers.

They're presumably hoping that parachuting in a respected City name will persuade us that the company deserves another chance. Try telling that to the struggling people forced into a spiral of disastrous debt after being persuaded to take out a payday loan.

It's not just Wonga that should be quaking at the tough new stance. The Money Shop was forced to refund £700,000 of interest and charges to 6,247 customers who took out unaffordable loans.

I look forward to seeing further censures of rule-breaking lenders.

Looking for credit card or current account deals? Search here