Wonga chief admits reforms are only ‘halfway there’

Payday lender has only contacted 27,000 out of 45,000 in arrears customers who were sent letters from non-existent law firms

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The Independent Online

A senior Wonga.com executive admitted before MPs that the company was only “half way” to reforming a culture that resulted in it spending hundreds of millions of pounds to refund customers it shouldn’t have lent to, and landed it with heavy fines.

During questioning of Nick Brookes, who joined just two months ago as chief credit officer, it also emerged that the controversial payday lender has only contacted 27,000 out of 45,000 in arrears customers who were sent letters from non-existent law firms chasing their debts.

He said that the tactic, designed to make customers believe debt had been passed to law firms or debt collection agencies, ended four years ago.

Mr Brookes told MPs customers were proving “challenging” to contact. Some 5,000 have responded to compensation offers and 99 per cent have accepted.

In total 300,000 Wonga customers have had their debts written off at a cost of more than £200m. The company has shaken up its management, and culled controversial ads featuring puppets.

 

Asked how far its reform programme has got, Mr Brookes said the company was “about half way there”. The Labour MP Andrew Love asked whether he was aware an employee involved in sending abusive tweets to MP Stella Creasy, a vocal critic of the company, and altering her Wikipedia entry was now “a special assistant to the chairman”. Mr Brookes said he would “look into it”.

Wonga subsequently said  it could not comment on individuals or roles at the company.

Mr Brookes described the debt collection letters sent out by the company from non-existent lawyers as “wrong”.

“I personally apologise to all of our customers for that happening. There is only a very small percentage wanting to have an independent look at that [compensation]. There is a big process of change going on at Wonga,” he added. Mr Brookes said a lot of complaints were now from people denied loans because of its new, tougher, lending criteria.

Which? chief executive Richard Lloyd had earlier said “We remain to be convinced that they have changed.

“The FCA should be all over Wonga and other payday lenders, to ensure they comply with the agreements they have reached.”

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