Tough Affordability Checks Should be the Norm
As a result of Wonga putting in place tough new affordability checks and writing off unpaid debts, Harrington Brooks will be able to remove over £3m of Wonga debt from customers’ debt management plans, the firm revealed today.
More than 10,000 of Harrington Brooks’ customers have Wonga debts and will no doubt welcome the news that the lender in total has written off £220 million worth of debts for 330,000 of its customers. A further 45,000 of Wonga’s customers in arrears will no longer have to pay interest on their loans.
However, the problem does not stop at Wonga. The FCA’s director of supervision, Clive Adamson, has said that the announcement should “put the rest of the industry on notice”, and Harrington Brooks agrees. Around 45% of Harrington Brooks’ customers have taken out a payday loan, and today the debt management firm is calling on all payday lenders to ensure that they consistently carry out robust affordability checks for their customers.
Matthew Cheetham, Chief Executive of Harrington Brooks comments: “We want to see every payday lender in the sector follow Wonga’s lead and introduce stricter lending criteria to address poor lending decisions. For too long the high-cost-credit sector has chased volumes causing considerable customer detriment. Harrington Brooks welcomes the efforts of the FCA to clean up the sector, but it is imperative that the regulator continues to enforce the new affordability requirements that came into effect in April.”
Notes to editors
As one of the UK’s largest personal insolvency companies, Harrington Brooks manages £920m+ of unsecured debts for over 75,000 customers and helps customer repay over £7m to creditors each month.
Established in 1998, its intention has always been to be a safe place for people in debt to find counsel and support – ensuring the best advice is given and appropriate solutions provided at all times.
It is a member of DEMSA, the industry trade association, which promotes good practice in the debt management industry to protect the interests of the public and the lenders to whom they owe money. DEMSA’s code of practice has approval from the Trading Standards Institute and goes further than the basic requirements of the law.