Wonga could go bust after £37 million loss
WONGA may change its name and even go bust following a clampdown on ripoff loans and a loss of £37.3million.
Britain’s biggest payday lender, which has been at the centre of a string of scandals, yesterday admitted it faces threats that cast ‘significant doubt’ over its future.
The loss represents a disastrous slump for the firm, compared to a profit of almost £40million in 2013.
It followed a year in which the company was castigated for using fake legal letters to threaten thousands of struggling customers.
It was also forced to write off £220million of debt belonging to 330,000 customers as it had failed to carry out proper affordability checks.
As a result of the controversies, the firm’s new management has considered changing the name as part of a recovery strategy, which will also see a brand relaunch later this year.
Details were revealed by executive chairman Andy Haste, who said: ‘We are not ruling it out or in.’
But he added that a name change would only work if the company can show it has a new business culture.
He said: ‘I honestly believe Wonga has to demonstrate real change from within its own skin.’ As part of a clampdown on payday lenders, Wonga and its rivals are currently going through a licensing process with the Financial Conduct Authority to satisfy the City watchdog they are operating within the law.
The firm admitted that if they do not receive the FCA’s approval, it ‘may cast significant doubt on the group’s and company’s ability to continue as a going concern’.