People will find it hard to understand why the payday loan company Wonga is still in possession of a consumer credit licence. So says
Unethical? Woefully so. Criminally fraudulent? Staff from the new regulator the
The company was ordered by the FCA to pay more than pound(s)2.6 million in compensation, but many will feel a financial penalty is not enough. The episode will only increase public doubts over whether the Government is doing enough to stamp out unacceptable behaviour.
It will also confirm consumers in their low opinion of payday lenders generally. While short-term loans can perform a useful function, controversy swirls around them. In April, The Herald revealed that
That is not to say that measures are not being taken to make the industry operate more in the interests of customers. The overall costs of payday loans will be capped by
That is good, but is it enough? The FCA's recent clampdown needs time to bear fruit, but the specific case of Wonga's deplorable behaviour, as recently revealed, begs a robust response. Councillor Rooney believes the fledgling regulator's credibility is on the line and that it must act decisively against Wonga, and be seen to do so, in order to reassure a sceptical public that it is up to the job of stamping out bad behaviour in the sector. Wonga issued the fake lawyers' letters a few years ago, but that makes it no less shocking. Just how underhand must a firm's conduct have been before its licence comes under threat?
People will find it hard to understand why the payday loan company Wonga is still in possession of a consumer credit licence.