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Home   Medway   News   Article

Wonga-backed survey of debt in Medway could appear later this summer

01 July 2014
by Chris Hunter

The long awaited results of a controversial survey into debt, backed by payday loan company Wonga, could be due in September.

Headed by MP Tracey Crouch and carried by the Citizen’s Advice Bureau, the survey was meant to take six months and provide insight into Medway’s debt problem.

But two years after it began in 2012, the wait for answers continues.

Last week Miss Crouch met with Medway CAB staff, including chief executive Dan McDonald, and reported further problems with “data analysis and interpretation”, which would delay the report further.

She said she was unhappy about the presentation of data, and resolving this would put publication back until after August.

Delays aside, the report has been contentious from the start since Wonga’s involvement was announced - the loan company agreeing to provide technological support and paying for CAB employees to be trained by an independent research company.

Wonga had originally offered to provide funding after building a relationship with the CAB, following a high-profile campaign two years ago in which workers chained themselves to a payday lender’s shop.

But the company’s reputation had since slipped lower, after it was announced it would have to pay £2.6m compensation to 45,000 customers for “unfair and misleading debt collection practices.”

The Financial Conduct Authority reported that: “Wonga was found to have sent letters to customers in arrears from non-existent law firms, threatening legal action.

In some instances, Wonga also added charges to customers’ accounts to cover the administration fees associated with sending the letters.”

Medway Labour Leader, Cllr Vince Maple, said the revelations came as “no surprise,” adding: “Our high streets are filled with these legal loan sharks and Fixed Odds Betting Terminals, both of which prey on people who really can’t afford it. What makes the situation much worse is the ease in which people can access credit online, from companies such as Wonga, which soon sees them spiralling into debt.

“Time and time again I have local residents contacting me about payday loans and the impact they have on them and their families. We need to do more to protect the vulnerable in society – Labour’s plan to give council’s more powers to shape our high streets, capping the cost of credit and improving access to alternative credit like credit unions would all be very positive steps forward.”

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