Minister welcomes Wonga debt write-off
A Baptist minister involved in a national campaign against the practices of payday lenders has welcomed news that one of the best known is writing off a huge amount of customer debt
On Thursday (2 October) Wonga announced it is writing off £220m of debts for 330,000 customers after putting in place new affordability checks.
Wonga’s new chairman Andy Haste said new stricter lending criteria would also mean accepting “far fewer applications from new and existing members”.
Last year Chris Lewis, the minister at Mount Zion Baptist Chapel in Bonymaen, east Swansea joined the national strategy group of Sharkstoppers, which is campaigning for a law to be introduced that will cap the level of interest on payday loans, as well as supporting the promotion of credit unions as fair alternatives.
He said, ‘A lot of us, up and down the country are delighted at the news that Wonga are writing off this amount of debt. That it is coupled with affordability checks is also good news.
‘In Sharkstoppers’ campaigns, nationally and locally, we have questioned the validity of the business model that appeared to profit from clients having to roll over loans, thus becoming trapped in a vicious spiral of debt.’
Wonga had been in discussions with the Financial Conduct Authority (FCA), and Mr 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.’
Despite the news, Mr Lewis said much is still to be done.
‘For us in Swansea, as for the campaign all over the UK, the work is not over and we are turning our attention to how we can encourage people to better understand the cost of credit.
‘We are encouraging credit union membership, and calling for a payroll deduction arrangement for NHS workers in England and Wales. In Swansea we are looking at some sort of ‘Be Credit Savvy’ educational vehicle, maybe a website and calling for pupil-run, credit union-backed Junior Banks in all Swansea schools.’
He said 15-year-old Ffion Price, a member of a young people’s group at Mount Zion, Bonymaen, joined him in speaking in support of this at the recent Movement for Change event at the Labour Party Conference in Manchester. Three hundred people were present, the largest fringe meeting of the conference.
Related: Swansea minister joins campaign against payday lenders