Wonga granted full FCA permissions

The FCA took over regulating the consumer credit industry from the Office of Fair Trading in April last year and firms had to apply for authorisation by 31 December 2015.

All payday loan companies are in the group of businesses that carry out consumer credit activities, but Wonga is thought to be the biggest payday lender to announce its authorisation.

The lender has previously come under fire from the FCA, and in June 2014 was ordered to pay compensation of over £2.6m to around 45,000 customers for unfair and misleading debt collection practices.

It later agreed to write off the loan balance of approximately 330,000 customers for not adequately assessing their ability to meet repayments in a sustainable manner.

It then announced a £37.3m loss for the year, with revenues dropping by almost £100m to £217.2m.

New rules in January 2015 capped the amount that high-cost short-term credit lenders can charge. Customers taking out a loan cannot pay back more than twice what they borrowed, or more than £24 per £100 borrowed. Fixed default fees have also been capped at £15.

Wonga since made major changes to affordability criteria, and recently began trialling a 90-day loan which allows customers to spread repayments over a longer period.

Andy Haste, Chairman of Wonga, 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.”