Leeds Credit Union Says Good Riddance to Wonga

Friday, August 31, 2018

Chris Smyth, Chief Executive of Leeds Credit Union, has said 'good riddance' to collapsed payday loan company, Wonga, following its entry into administration.

Chris commented: ''We are not sorry to see the demise of Wonga but we are very sorry about the tens of thousands of their former customers that the firm mis-sold loans to and who were often led into spiraling debt.

At Leeds Credit Union we have warned for many years about the excessive interest rates, typically as high as 5000%, charged by Wonga and other payday loan outfits - and we are pleased that the Financial Conduct Authority (FCA) finally took action to cap interest rates in 2015.

However, payday loan charges are still typically 1200& APR and this compares to the maximum that a Credit Union will ever charge of 42.6% APR.

The problem of high cost credit, payday lenders and doorstep has not gone away. We hope that the news about Wonga will make people think twice about using other high cost lenders and realise that there are lower cost alternatives available such as a Credit Union.

Leeds Credit Union is pleased that the FCAs recent consultation paper* has explicitly expressed support for the providers of affordable credit like Leeds Credit Union.

*CP 18/12 is the FCAs current consultation on further measures to limit providers of high cost credit. The consultation closes today on 31st August 2018.