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Wonga says sorry
Today we’ve issued a public apology following an announcement by the Financial Conduct Authority. Our media statement is below.
Wonga was set up in 2007 to meet the widespread demand for short-term credit. We know we attract a wide range of views from the media, politicians and the public alike and we know we haven’t always got things right.
Over the coming months, you’ll see lots of changes happening at Wonga, which we’ll share with you on this site.
Wonga apologises for two sets of issues and will pay redress to customers
Following today’s announcement by the FCA, Wonga has apologised to its customers for historical debt collection practices and for separate system errors. The company is taking action to ensure customers are appropriately compensated and will contact those affected. It is also significantly improving its business processes to ensure it addresses the widespread demand for short-term credit in the most responsible way.
Historical debt collection activity
Between 2008 and 2010, Wonga sent letters from ‘Barker & Lowe’ and ‘Chainey, D’Amato and Shannon’, to around 45,000 customers, giving the misleading impression that the customers’ outstanding debts had been passed to a law firm, or other third party, with the threat of adverse consequences if the debts were not repaid quickly. Some of these customers also paid additional collection charges after these letters were sent out.
The practice was stopped voluntarily by the company in November 2010 and information was provided to the OFT (Office of Fair Trading), Wonga’s regulator at the time, in January 2011.
Wonga is now working with a third party appointed in conjunction with the FCA on a redress programme for anyone who received one of the letters. In the coming weeks Wonga will be contacting everyone affected to agree compensation*.
Tim Weller, interim Wonga CEO, said: “We would like to apologise unreservedly to anyone affected by the historical debt collection activity and for any distress caused as a result. The practice was unacceptable and we voluntarily ceased it nearly four years ago.”
While performing a review of its systems and records in preparation for FCA regulation, Wonga discovered technical errors, unrelated to the historical debt collection practices, which resulted in miscalculation of some customers’ balances. As a result, just under 200,000 customers overpaid the company, the majority by less than £5, while a greater number underpaid.
Having informed the FCA, Wonga will now contact any customers who overpaid as a result of these system errors to offer appropriate compensation. The company will not be seeking repayment from anyone who underpaid.
Weller continued: “I would also like to apologise to customers affected by our system errors. We fully accept the impact on customers was negative in many cases and our priority is to ensure we deal quickly and fairly with customers who’ve been impacted, again in conjunction with the FCA.”
Summarising both sets of issues, Weller added: “We will learn from these mistakes and continue working with the FCA to build a better Wonga for the benefit of our customers. We’re strengthening our internal controls and systems and now have almost 1,000 people around the world, who are working hard to serve the demand for short-term credit in the most responsible way possible.”
Note to editors
*Any Wonga customers who think they may have been affected should ensure the company holds the most up-to-date contact details for them. They should visit www.wonga.com/apology to do so. The site also includes further helpful information about the issues announced today. Alternatively they can call Wonga on 0800 840 0836, although the company will be contacting anyone affected proactively.
If you’re a customer or journalist you can get in touch with us in the following ways:
T: 020 7138 8330
T: 020 7284 5679
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