Wonga collapse departs Britain’s other payday lenders in firing line

LONDON (Reuters) – The collapse of Britain’s biggest payday loan provider Wonga will probably turn the heat up on its rivals amid a rise in grievances by clients and telephone telephone calls by some politicians for tighter legislation. Britain’s poster kid of short-term, high-interest loans collapsed into administration on Thursday, just weeks after increasing 10 million pounds ($13 million) to greatly help it deal with an boost in settlement claims.

Wonga stated the rise in claims had been driven by so-called claims administration businesses, businesses which help consumers winnings payment from companies. Wonga had recently been struggling after the introduction by regulators in 2015 of the limit in the interest it among others in the market could charge on loans.

Allegiant Finance Services, a claims management business centered on payday lending, has seen a rise in business into the previous two months as a result of news reports about Wonga’s economic woes, its handling manager, Jemma Marshall, told Reuters.

Wonga claims constitute around 20 % of Allegiant’s company today, she stated, including she expects the industry’s attention to make to its competitors after Wonga’s demise.

One of the greatest boons for the claims management industry happens to be payment that is mis-sold insurance coverage (PPI) – Britain’s costliest banking scandal who has seen British loan providers shell out vast amounts of pounds in settlement. Continue reading “Wonga collapse departs Britain’s other payday lenders in firing line”