Wonga, the payday lender infamous for its high-interest loans, has agreed to write-off a total of £220m in loans, for 330,000 customers.
The decision affects customers who were in arrears i.e. past the point of due payment, of 30 days or more.
Wonga announced the decision, saying it was a “consequence of discussions with the FCA,” the Financial Conduct Authority.
The FCA, which took over regulation of consumer credit in April, said it discovered in Wonga’s submitted reports that they were “not taking adequate steps to address customer’s inability to meet repayments in a suitable manner.”
“We are determined to drive up standards in the consumer credit market and it is disappointing that some firms still have a way to go to meet our expectations,” said Clive Adamson, director of supervision at the FCA. “This should put the rest of the industry on notice – they need to lend affordably and responsibly.”
Andy Haste, the new chairman of Wonga, stressed that there was much to do to make Wonga an “accepted, sustainable business.”
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