Loans No Checking Account – The controversial British lender, Wong, has stopped making a formal loan application since the bankruptcy proceeding has come to an end.
The payday loan provider has entrusted independent care providers with their ability to pay their debts. Operations are fixed until a decision is made whether the company can save or not.
What happened to Wonga?
Wonga is Britain’s largest lender. It holds about 40% market share.
However, in recent years, the company has begun to fight financially, and last month said they were considering all options a few weeks after Wonga’s shareholders invested more than £ 10m for the company to try to make it. Floating company
Wonga said that this injection is necessary to protect against the effects of the recent increase in compensation claims they receive. The company insists that most of these clients are seeking compensation for loans issued before the guidelines. New financial operations will be introduced three years ago.
Why customers want to get compensation from Wonga?
Wonga has been criticized for their lending behavior before the FCA was enacted. In 2558, it was said at this time that the company offered high interest rates on its financial products and used improper marketing practices that targeted weak borrowers. Advertising their infamous TV dolls.
Other claims are from Wonga’s unfair debt collection practices against companies that have reportedly sent threatening letters from a non-existent law firm to allow the borrower to repay the loan.
Chief executive of Citizens Advice Guy Gillian said, “While many of these problems are from before 2015, people still come to us after selling a loan they can not repay because of the rules of pay. Good enough”
How is Wonga affected by FCA price cuts?
Cambrian’s general manager of savings and loans, Ann Francis, said, “By collapsing into administration due to these complaints,” Wonga has reaped what it has sown. ”
Francis criticized the company’s business model, which she believed to be complete. “With high interest rates, fines and unsustainable debt collection methods. When the regulator does not hold the model anymore. ”
Francis discusses the FCA’s short-term lender guidelines in 2558 to protect borrowers from interest rates and fees that some lenders use.
These rules include an interest limit of 0.8% per day. Additional charges are limited to £ 15 for each missed payment (referred to as the “default fee”) and the total amount payable by the borrower. Repayment never costs more than 100% of the loan amount.
If you need a £ 200 loan, you need to pay a loan to a lender to pay interest and fees up to £ 400, while many lenders turn to responsible lending. Wonga – Previously, interest rates had risen between 5,853% in April, indicating that their business model was struggling.
How is Wonga affected?
The influx of compensation caused Wonga’s financial turmoil in 2014. The lawsuit scandal resulted in Wonga paying more than £ 2.6 million to nearly 50,000 clients.
That same year, the company was ordered to cut off 220 million pounds of debt and debt for 375,000 borrowers. The court believes that it should not be accepted by creditors. Since lenders are required by law to conduct a thorough pay check of all those using a loan to make sure they can pay, Wonga has been closely monitored. Because they can not do it and they pay.
By 2015, Wonga reported a loss of more than 80 million pounds, while they improved in 2016. They still ended the year with a loss of nearly £ 65 million.
Businesses plan to generate profits and their reputation through 2017, but they have suffered serious security breaches; With cybercriminals stealing personal information belonging to more than 245,000 customers in this process.
What do these mean for Wonga’s customers?
Wonga said in a statement. “Customers can use Wonga’s credit management services. But businesses in the UK will not accept new loans. ”
This came after the company confirmed that they were evaluating their options during their voluntary administration. It is still possible that Wonga may attempt to raise funds by selling unclear debts to third parties. I have not decided yet.
In the meantime, FCA is standing by to take care of the company and ensure that these clients are treated fairly.
Borrowers should compare before taking out a loan.
While Wonga may try to cope with the introduction of the FCA approach, many lenders continue to provide responsible credit support.
Guy Gillian says that since cheap hats are imported, Citizens Advice “now sees half the amount of payday loans we make on a dark day before capping interest and expenses so we know what kind of rules this works.”
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