Wonga is to write off the debts of 330,000 customers after it admitted it has made loans to people who could not afford to repay them.
The move by the pay-day lender comes after an agreement with the Financial Conduct Authority (FCA) that requires it to make significant changes to its business immediately.
The review means that about 330,000 customers who are currently in excess of 30 days in arrears will have the balance of their loan written off and will owe Wonga nothing.
Approximately 45,000 customers who are up to 29 days in arrears will be asked to repay their debt without interest and charges and will be given an option of paying off their debt over an extended period of four months.
Wonga’s new chairman Andy Haste said: “We want to ensure we only lend to those who can reasonably afford the loan in question and during my review, it became clear to me that this has unfortunately not always been the case.
“I agreed with the concerns expressed by the FCA and as a consequence of our discussions we have committed to taking these actions.”
Source – Northern Echo, 02 Oct 2014