Business

Wonga: Fourfold rise in compensation claimant estimate

Wonga ended its sponsorship of Newcastle United in 2016 Image copyright Getty Images
Image caption Wonga sponsored Newcastle United during more successful times for the lender

More than 40,000 customers of former payday lender Wonga are seeking compensation with more expected to follow suit, administrators have said.

The total is four times the previous estimate, accountants Grant Thornton said, although many will expect little in terms of redress.

These customers have complained about being mis-sold loans they could not afford to repay.

The Treasury Committee of MPs has said their cases have been "cast aside".

New compensation claims

Wonga fell into administration in August last year, with thousands of customers awaiting ombudsman rulings on whether they were mis-sold loans.

The company's demise in the UK followed a surge in compensation claims from claims management companies acting on behalf of people who felt they should never have been given these loans.

Other ex-customers are expected to make claims in the future.

A letter from Grant Thornton - Wonga's administrators - to the committee's chairwoman Nicky Morgan said: "The total number of redress claims is currently more than four times the number you referred to... on 26 February and we can expect this to increase, when the administrators publicly request claims from borrowers who believe they may have been sold an unaffordable loan."

Its boss, Dave Dunckley, also said that Grant Thornton would set up a portal for customers to make claims directly online, although there is currently no date set for that to start.

He also advised customers that using a claims management company would not accelerate the claims process, and might expose them to charges that will be deducted from any final payment they could receive.

Mrs Morgan said: "This problem is clearly much bigger than expected. Wonga's creditors and claimants are now in the hands of an administration process, waiting to discover what their share of Wonga's assets will be, which could now be smaller as more people make claims."

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