Million Brits can get payday loan compo

Lenders ‘dragging their heels’ over payouts to customers pushed into hopeless cycle of debt

MILLIONS of pounds’ compensation has yet to be claimed by borrowers who became locked in a spiral of debt with payday loans firms.

Lenders such as Wonga and Quick Quid have been accused of dragging their heels on paying back customers charged sky-high rates on short-term loans they had no hope of paying back.

The Financial Conduct Authority ordered the lenders to make amends to borrowers who had been dragged into further debt before a cap was imposed on the industry’s charges in 2014.

But compensation experts claim the firms’ response has been sluggish, with over a million customers still owed payouts over the controversy. Vincent Vernon of Pay Day Refunds said it is handling 32,000 customers claims, a quarter of them with Wonga.

He added: “There could be in excess of a million customers who have suffered as a result of irresponsible lending who are owed money back.

“Three of the poorest-responding lenders are Wonga, Curo and Quick Quid. These lenders are continuing to ignore UK consumer rights towards their irresponsible lending. They’re fast to lend and extremely slow to repay.”

James Walker, from complaints service Resolver, added: “Of all the mis-selling scandals of recent decades, the millions of payday loans flogged to hard-up people struggling to make ends meet is both tragic and outrageous.

“Astronomical loans were sold, with little to no checks, leaving desperate people averaging seven loans each at any given time and borrowing to pay off their other loans. Every loan carried huge interest that often made debt worse.”

He claimed firms are shutting down customers’ online accounts to “make it difficult for customers to make claims”.

But he added: “The fact that people’s accounts no longer exist online doesn’t mean they lose their right to complain.

“As with any other loan, credit or financial product, the firm must keep a record of historic loans, which most do for the statutory six years and often longer.”

Wonga said: “We assess customer claims on a case-by-case basis. In line with regulatory standards, it can take up to eight weeks before a claim is processed.”

Last week it emerged Wonga had to call on its own financial backers for £10million to save it from going bust.

TAKING LONGA Firms are ‘slow to pay back cash’