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Written question asked by Zarah Sultana (Labour) on Monday, 1 June 2020, in the House of Commons. It was due for an answer on Thursday, 4 June 2020 (named day). It was answered by John Glen (Conservative) on Thursday, 4 June 2020 on behalf of the Treasury.

Wonga

Question

To ask the Chancellor of the Exchequer, how many claims for refunds from Wonga customers who were mis-sold higher risk loans remain outstanding; and if he will make an assessment of the potential merits of providing support from the public purse to those customers who only received 4.3 per cent of the compensation due to them.

Answer

When a firm enters administration, assets are pooled and used to cover customer redress claims and administration costs. In the case of Wonga, the pooled assets are not sufficient to meet all of the redress claims. The administrator, Grant Thornton UK LLP, is therefore unable to pay out 100% of these claims and must address claims in order of the creditor hierarchy. The number of redress claims and the amounts due in the case of Wonga is a matter for the administrators.

The Financial Conduct Authority (FCA), who regulate payday loans, has the power to decide which activities are given Financial Services Compensation Scheme (FSCS) protection. In 2016, the FCA decided not to extend FSCS protection to most consumer credit activities because it believed other regulatory requirements were sufficient. The full reasoning behind the FCA’s decision is set out in a letter from their Chief Executive to the Chair of the Treasury Select Committee on 15 February 2019.

Secondary information

Type
Written question
Reference
52558
Session
2019-21
Subjects
Compensation Loans Misrepresentation Wonga
Contains statistics
Yes
Link
View this Written question on www.parliament.uk