Wonga data breach may affect over 250,000 UK customers

Wonga offers short term high cost credit (STHCC) loans at interest rates starting at over 1,200% per annum, became aware of a problem last week but did not realise until Friday that data could be accessed externally. It alerted the authorities and started to contact borrowers offering a dedicated customer services phone line for those affected.

Wonga said it was “urgently investigating illegal and unauthorised access” to the personal data of some of its customers in the UK and Poland;  It is understood that the breach could affect up to 270,000 current and former customers.

The company would not disclose where the breach had taken place.

Cost of Alternative Consumer Borrowing

A huge drop in payday loans given out to people short on money has increased fears of a rise in borrowing from illegal lenders. Yet safer, cheaper ways to borrow do exist and they should be your first port of call if you’re looking for some quick, short-term cash options.

 

Fall in payday loans

Today’s report by the Consumer Finance Association (CFA), the trade body that represents short term lenders, says eight out of ten short-term loan applications are now turned down.

CFA figures also show the number of payday loans given each month in 2015 is 70% less than in 2013.

This fall in people receiving payday loans follows tighter regulation of the industry. This includes new rules introduced last January that caps the fees and interest that can be charged to no more than double the amount borrowed.

 

Loan shark dangers

If you’ve been turned down for a short-term loan, it’s no surprise you may look elsewhere for the money.

The CFA report suggests that 4% of people who are rejected for short-term lending go to unlicensed lenders instead. The same survey also showed that more than three quarters of people are unable to tell if their lender was licensed or not.

If you search online, for a loan, watch out for websites which look legitimate but are really based overseas. They won’t have to follow the new regulations capping fees and charges, so you could end up paying far more than you expect.

However, loan shark lenders are probably the worst option. Though these illegal lenders will often start out friendly and supportive, not only are interest rates far more than elsewhere, missing payments could lead to harassment or pressure to borrow more money to cover costs.

 

Alternatives to payday loans

Instead of going down these routes and taking on additional debt, consider all the alternatives available first.

Depending on why you need the money, you’ll find lots of different options. You might even find you don’t need to borrow money at all.

Below is an example of the costs of alternative consumer borrowing;

 

LFgraphic_borrowing

Wonga has become the payday lending industry’s first major participant to receive a crucial licence from the City watchdog, paving the way for it to rebuild its business after two years of reputational disasters.

Sky News can reveal that Wonga was on Monday granted full authorisation by the Financial Conduct Authority (FCA), just weeks before an interim permission to operate was due to expire.

 

The granting of a licence comes as Wonga, the UK’s biggest payday lender, seeks to diversify its business away from the short-term lending model that made it a lightning rod for political and public anger over the sector’s rapid growth.

 

Neither the FCA nor Wonga had planned to make public statements about the regulator’s decision to authorise the company, but in response to an enquiry from Sky News, Andy Haste, Wonga’s chairman, said:

 

“FCA authorisation is an important milestone for Wonga as we continue to build a responsible business with a long-term future, putting customers and good governance at the heart of everything we do.”

 

“We have made progress against our commitment to deliver change and the FCA’s examination of the business has been rigorous and thorough.

 

“We support the work of the FCA and we will continue to work with them openly and constructively as a responsible participant in the financial services sector.”

 

The authorisation process has been a requirement since the City watchdog assumed responsibility for regulating thousands of consumer credit providers in 2014.

 

Wonga began trialling a 90-day loan late last year which allows customers greater flexibility to spread repayments over a longer period.

 

The product, which is being piloted for several months, was the first extension of the Wonga brand to be unveiled since the company announced that it had made a loss of more than £37m in 2014.

 

Its slump into the red followed a string of regulatory settlements, customer redress and restructuring costs triggered by the loss of more than 300 jobs.

 

Last year, it was forced by the FCA to pay more than £2.5m in compensation to 45,000 customers who were sent letters purporting to be from law firms but which in fact did not exist.

 

A near-£20m charge to cover the cost of compensation, as well as legal and administrative costs related to the issue, was taken in its annual results for 2014.

 

Once tipped to float in New York with a bumper valuation, Wonga faces an arduous return to profitability as it contends with the imposition of a limit on the amount that payday lenders can charge in interest.

 

The regulator has estimated that the vast majority of the roughly 400 payday lenders operating in Britain will go out of business following the introduction of a price cap on loan and repayment charges.

 

A YouGov poll published last week ranked Wonga second on the list of most-improved brands, behind the Co-operative Bank.

 

Wonga has overhauled its advertising in an attempt to reposition itself as a responsible lender, and removed its logo from the replica shirts of Newcastle United, the Premier League football team it sponsors.

 

A source close to the company said it had made significant efforts to improve its transparency and governance.

 

As published by Sky-News

Cash Genie. Owe them money? Or are you due compensation? Cash Genie have agreed to refund customers £20m

Ariste Holding Limited, trading as Cash Genie, has entered into an agreement with the FCA to provide over £20 million redress to more than 92,000 customers for unfair practices. Ariste have now gone into Liquidation (see below)

The following are extracts from the Financial Conduct Authority Website. To read the full article click the link at the end

 

What you should do if you still owe Cash Genie money

Customers should continue to make payments unless they are told to stop by Cash Genie. Borrowers who are experiencing financial difficulty should contact Cash Genie to discuss their options.

If you are struggling with your debts, there are free debt advice services which can help you. You can find out more on the Money Advice Service website.

 

Cash Genie liquidation

Cash Genie has voluntarily entered into a solvent liquidation. The firm handed over to liquidator RSM Restructuring Advisory LLP on 5 January 2016. This will not affect the payment of redress to customers.

Customers can still cash any redress cheques already received. If customers have questions or complaints about the redress scheme, or think they may be due redress, they can still contact Cash Genie using the details below.

www.cashgeniecomms.co.uk   or call 0333 366 0023

www.customerredress@cashgenie.co.uk

 

You do not need to use the services of a claims management company

To see the full article click on the following link;-

www.fca.org.uk/news/cash-genie-customers-refund-debt-write-down