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Wonga collapse departs Britain’s other lenders that are payday firing line

Wonga collapse departs Britain’s other lenders that are payday firing line

LONDON (Reuters) – The collapse of Britain’s biggest payday loan provider Wonga probably will turn up the temperature on its competitors amid a rise in grievances by clients and calls by some politicians for tighter legislation. Britain’s poster kid of short-term, high-interest loans collapsed into administration on Thursday, just weeks after increasing 10 million pounds ($13 million) to aid it deal with an upsurge in payment claims.

Wonga stated the surge in claims had been driven by alleged claims administration businesses, businesses that assist consumers winnings payment from companies. Wonga had been struggling following a introduction by regulators in 2015 of a limit from the interest it among others in the market could charge on loans.

Allegiant Finance Services, a claims management business dedicated to payday lending, has seen a rise in company into the previous two months as a result of news reports about Wonga’s economic woes, its handling director, Jemma Marshall, told Reuters.

Wonga claims constitute around 20 % of Allegiant’s company today, she said, including she expects the industry’s attention to make to its competitors after Wonga’s demise.

One of the primary boons for the claims administration industry happens to be payment that is mis-sold insurance coverage (PPI) – Britain’s costliest banking scandal which includes seen British loan providers shell out huge amounts of pounds in settlement.

But a limit regarding the costs claims management companies may charge in PPI complaints plus an approaching 2019 deadline to submit those claims have driven many to shift their focus toward payday loans, Marshall said august. Continue reading “Wonga collapse departs Britain’s other lenders that are payday firing line”