Wonga, was a British payday loan provider of short-term, high-cost credit that was founded in 2006 and had operations in the UK, Spain, Poland and South Africa.

The interest charged by Wonga reached the equivalent of 5,853% APR at times and was widely criticised.

Following restrictions on its interest charges, rollover loans and customer compensation claims, Wonga went into administration in August 2018.  


Wonga was co-founded by Errol Damelin and Jonty Hurwitz in October 2006.

Damelin has said that the goal was to disrupt the short-term credit industry by providing transparency, exact control of amount and payment date, immediate access to funds, and no faxing or emailing of documents.

Wonga had a lot of problems initially, such as the banks saying they would not accept proof of identity without physical documents.  However, within five minutes of launch, the first loan application was processed and demand grew rapidly.  

The full launch of Wonga.com was July 2008 and in July 2009 Wonga raised a further £13.9m of funding, then a third round of £73 million of funding in 2011.

New Financial Rules

From July 2014, all payday loan companies had to conform to new rules, which limit roll-overs of loans and force them to increase affordability checks. From January 2015, they also had their charges capped.

On 30 September 2014, Wonga announced that its profits for the year to the end of December 2013 had fallen by 53% to £39.7 million. The company blamed the cost of compensation paid to customers – which in total cost the company £18.8m.

Wonga also said it expects to be "smaller and less profitable" in future, in part due to new controls set by the regulator, the Financial Conduct Authority (FCA). Wonga saw losses more than double in 2015 as tougher regulation of the payday loan sector led to a sharp fall in the number of loans taken out by UK consumers; the business reported a pre-tax loss of £80.2m for the year – up from £38.1m the year before.

The drop in revenues was driven primarily by a new price cap and stricter criteria set by UK regulators.

 Data Breach

In April 2017, Wonga suffered a data breach which affected up to 245,000 customers in the UK. The information stolen included the last four digits of customers' bank cards – information used by some banks as part of the login sequence for online accounts.

Ownership and corporate structure

The company was mostly owned by venture capital funds.

Damelin resigned as Chief Executive in November 2013 to become part-time chairman and non-executive director, then finally left the company in June 2014. He cashed in his shares for a very sizeable amount of money.

Unfair Practices

In May 2012, the company was required by the Office of Fair Trading (OFT) to improve its debt collection practices, after it was found that it had sent letters to customers in 2010 accusing them of committing fraud and saying that the police might be informed.

In June 2014, the FCA found that Wonga's debt collection practices were unfair and ordered that they compensate affected customers. The FCA found that between October 2008 and November 2010, Wonga had sent their customers letters claiming to be from non-existent law firms "Chainey, D'Amato & Shannon" and "Barker and Lowe Legal Recoveries", to force customer to repay debts.  

In some cases, customers were charged for the supposed lawyers' fees for these letters. This practice had been uncovered by the OFT in 2011, after Wonga was asked to disclose information about its debt collection practices.

Consequent to discussions with the FCA, on 2 October 2014 Wonga agreed to write off the debts – thought to total £220 million – of 330,000 customers who were in arrears of thirty days or more.


In October 2014, the UK’s Advertising Standards Authority (ASA) banned Wonga from using a TV advert that  breached its code because of a claim that customers would save money. The authority said this was likely to be interpreted as a statement that Wonga’s loans were cheaper than those of other lenders and was therefore a price comparison.

It ruled that Wonga should consequently have informed consumers of its 5,853% annual interest rate.

It was the third Wonga advert to be banned by the ASA in 2014.

The Collapse of Wonga

The collapse leaves an estimated 200,000 customers still owing more than £400m in short-term loans. But borrowers were told to continue making payments and administrators are expected to sell Wonga’s loan book to another lending firm.

The collapse means about 500 people lose their jobs, mostly in the London area where the company has its head office.

Labour MP Stella Creasy (@stellacreasy)

As Wonga fell into administration, the Labour MP Stella Creasy, a prominent payday loan campaigner, tweeted that Wonga’s customers need to be protected, but warned that the vulnerable were still being targeted.

Stella has been a keen supporter for people victimised by payday loan companies such as Wonga and has fought for their rights.

“Wonga’s customers need to be first in queue for protection for the administrators - and believe me amigoloans, Vanquis, Oakum et al...you are all in my sightline to hunt down… “

Where did it all go wrong for Wonga?

Martin Lewis, founder of MoneySavingExpert, said the firm’s collapse was a cause for celebration. “Normally when firms go bust, the fear is diminished competition. Not here. Wonga’s payday loans were the crack cocaine of debt – unneeded, unwanted, unhelpful, destructive and addictive. Its behaviour was immoral, from using pretend lawyers to threaten the vulnerable, to pumping its ads out on children’s TV.

Good riddance to a company that has soaked people in need and caused a lot of grief, but it is sad for the employees that lost their jobs.

If you have any bad experiences with Wonga or other payday lenders, do let me know – go to the About page then Contact Us.








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