News Column

Payday loans Wonga founder resigns as company director

June 14, 2014

Jennifer Rankin and agencies

A founder of the payday lender Wonga, Errol Damelin, has quit as a director of the company, seven months after stepping down as chief executive.

His decision to go leaves the UK's biggest payday lender without a permanent chief executive or chairman, as the industry is poised to enter a period of tighter regulation.

Last week, Niall Wass, who replaced Damelin as chief executive in November 2013, announced he was quitting.

Wonga has come under sustained attack for charging interest rates as high as 5,853% a year. The company, which has been criticised by MPs for "legal loan sharking", will soon be subject to tougher regulation from the UK's financial regulator.

From July, the Financial Conduct Authority will restrict the number of times loans can be rolled over or extended and prevent firms making more than two unsuccessful attempts to take cash from clients' bank accounts.

The payday lending industry, which has been condemned by the archbishop of Canterbury as morally wrong, has also been criticised by competition authorities, who said this week that lack of competition could be adding as much as pounds 60 to customers' bills.

Jennifer Rankin and agencies

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Source: Guardian (UK)

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