Wonga mulls name change as it agrees to write off worst loans
Online payday lender Wonga yesterday agreed to tighten up its lending criteria, and to write off more than 300,000 of its worst loans.
And the lender fears its name is so damaged it could scrap the brand, or keep it only on some products rather than for the whole group.
The firm has come under firm as critics accuse it of irresponsible lending, and new boss Andy Haste is trying to clean up the business and its image.
Under the agreement with the Financial Conduct Authority, Wonga is bringing in tighter loan-to-income criteria, and will monitor customers who take out new loans the moment an old one has been repaid.
In future, anyone turned down for a loan will have to wait a month before applying again.
Wonga has applied this criteria to outstanding loans.
Anyone who would have been turned down under the new rules will be given some level of debt relief.
Those who fall into the category and are more than 30 days late in repayments will have the whole loan written off. This amounts to 300,000 borrowers.
Those between one and 30 days in arrears will repay only the capital, not the interest or fees. This is another 45,000.
“These announcements on writing off customers debt and strengthening affordability are the start of a programme of long-term change designed to make sure Wonga always lends responsibly and transparently,” said Haste. “I wouldn’t rule out a name change in the future, but at the moment it’s about real, customer-focused change at Wonga that shows we have a role to play in financial services – not a new name.”