Last year Wonga was ordered to pay more than £2.6m compensation by the #Financial Conduct Authority (FCA) for “unfair and misleading debt collection practices”, after it was found to have sent threatening letters to customers from non-existent law firms.
On Tuesday Sky News reported that Wonga would post a pre-tax loss of about £70m in 2015, compared with £37m a year earlier. The results will also show a sharp decline in Wonga’s revenues from £215m in 2014, the channel said.
Last year interest and fees on all high-cost short-term credit loans were capped at a daily rate of 0.8% of the amount borrowed. Meanwhile, if borrowers do not repay their loans on time, default charges must not exceed £15, while the total cost including fees and interest is capped at 100% of the original sum.
Wonga –which recruited Andy Haste, a former boss of RSA insurance group, to clean up its image in 2014 – has said it wants to move its business away from the short-term lending that made its name, but also made it the focus of public anger.
The results, due to be announced on Wednesday, appear to raise questions about the success of the company’s attempts to reinvent itself in the tougher regulatory environment, as it tries to shrug off past controversies over its business practices.