Wonga clients with badly sold loans were told they would only get back 4 pence for every £ 1 in compensation owed, and much later than expected.
Administrator Grant Thornton UK LLP has confirmed that it has started sending correspondence to all unsecured creditors, including 358,129 eligible relief seekers.
It will pay a final dividend of £ 23million, representing 4.3 pence to £ 1 on agreed debts of creditors totaling £ 535million. Payments were due to be made by the end of January, but the administrator has confirmed they will be made within the next four weeks.
A spokesperson said: “The final dividend payment, amounting to 4.3% of the agreed claims against Wonga’s estate, will be made over the next few weeks by wire transfer or check.
“As the joint administrators explained throughout the administration, the final dividend payment is significantly lower than the values of the accepted claims, as the total value of all the accepted claims greatly exceeded the money available at to share.”
Wonga clients failed
Wonga customers criticized the miserable payments. One said: ‘I just got my email and they said I owe around £ 1,200 but I will only get £ 48. It is an absolute disgrace.
Another customer posted on Debt Camel: “My email from Wonga was very disappointing today. It was a payout of £ 7,010 and only got £ 302. Totally disgusting, glad they don’t exist anymore.
UK’s largest payday lender, Wonga Group Limited, went into administration in August 2018 and around 200,000 clients had outstanding loans.
However, around 400,000 borrowers were eligible for redress due to poorly sold and unaffordable loans dating back to 2007, according to Debt Camel.
Sara Williams, Founder of Debt Camel, said: “A lot of people will have hoped for more than 4.3% and are very upset. It is not the administrators’ fault that there is so little money to share among so many people.
“It’s the regulators’ fault if they allowed Wonga to break the rules by saying affordability should be checked. And now they haven’t made sure these Wonga victims get the compensation they should have. “
Due to the nature of high cost short term credit, companies are not covered by the Financial Services Compensation Scheme (FSCS).
In 2014, Wonga was forced to write off interest and fees for 45,000 clients, costing it £ 2.6million. And 330,000 customers saw their balance fully written off.
In 2016, it reported a decline in its income from £ 217.2million in 2015 to £ 77.3million in the year to December 2015 and recorded a pre-tax loss of 80, £ 2million as it underwent a ‘transformation to treat customers fairly using affordability assessments. ”.