Wonga.com

Wonga Group Limited
Wonga.com
Company typePrivate
IndustryTechnology finance
Founded2006; 18 years ago (2006)
Founders
Defunct2020; 4 years ago (2020)[1]
FateAdministration
Headquarters
London
,
United Kingdom
Areas served
Key people
Tara Kneafsey (CEO)
Grant Thornton (Administrators)
ProductsPayday loans
SubsidiariesBillPay (2013-2017)
Websitewww.wonga.com

Wonga.com, also known as Wonga, was a British payday loan firm that was founded in 2006. The company focused on offering short-term, high-cost loans to customers via online applications,[2] and began processing its first loans in 2007.[3] The firm operated across several countries, including the United Kingdom, Spain, Poland and South Africa;[4] it also operated in Canada until 2016,[5] and in Germany, Switzerland, Austria and the Netherlands through the German payments business, BillPay,[4][6][7] between 2013 and 2017.[8][9][10]

The company was responsible for inventing fully automated risk processing technology to provide short-term, unsecured personal loans online, including via tablet and mobile app.[11] However, it also drew wide criticism for the interest it charged, equated to an annual percentage rate (APR) of 1,509%;[12] an example of this was that a loan of £100 over seventeen days (Wonga's average loan term) required £113.60 to repay. The company was criticised heavily by politicians, including former Labour Party leader Ed Miliband as a leading example of predatory lending.[13] The firm's debt collection practices were also scrutinised by the Financial Conduct Authority (FCA), who found the firm had lent money to many who would never be able to repay and Wonga agreed to compensate 45,000 customers for unfair and misleading debt collection practices.[14]

By 2015, the company began to incur losses, which were further increased by discontinuation of sponsorship deals, a data breach in 2017, and a surge of customer compensation claims. Despite an emergency cash injection from shareholders to prevent it becoming insolvent, the firm fell into administration on 30 August 2018, with Grant Thornton appointed to wind down the business, sell assets and identify creditors. By March 2019, administrators noted that compensation claims against the firm increased, but with many claimants unlikely to receive the full value of their claim.

  1. ^ "WDFC UK LIMITED filing history - Find and update company information - GOV.UK". Companies House. Retrieved 25 October 2023.
  2. ^ Simon Read (10 October 2012). "Simon Read: Need cash? Need an APR of 4,214 per cent? Welcome to Newcastle's new sponsor Wonga". The Independent. Retrieved 4 December 2012.
  3. ^ "About Wonga". wonga.com. Archived from the original on 7 December 2011. Retrieved 7 December 2011.
  4. ^ a b Titcomb, James (18 October 2013). "Wonga continues global expansion with German deal". The Telegraph. Retrieved 31 August 2018.
  5. ^ "Wonga leaves the Canadian payday loan market". GoDay.ca (on Google+). 10 May 2016. Retrieved 31 August 2018.
  6. ^ Osborne, Hilary (18 October 2013). "Wonga buys German payment firm BillPay as global expansion continues". The Guardian. Retrieved 31 August 2018.
  7. ^ Lunden, Ingrid (18 October 2013). "E-Loan Specialist Wonga Buys BillPay, The PayPal Of Germany, To Move Deeper Into Payments". TechCrunch. Retrieved 31 August 2018.
  8. ^ "Wonga agrees sale of its German payments business, BillPay". Wonga.com. 15 February 2017. Retrieved 31 August 2018.
  9. ^ Murgia, Madhumita (5 February 2017). "Wonga to sell profitable Berlin-based BillPay to Klarna". Financial Times. Retrieved 31 August 2018.
  10. ^ Lunden, Ingrid (6 February 2017). "Klarna buys BillPay, the PayPal of Germany, for $75M from Wonga". TechCrunch. Retrieved 31 August 2018.
  11. ^ Lewis, Tim (16 October 2011). "Your prosperity could count on an algorithm". The Observer. Retrieved 17 March 2012.
  12. ^ Rupert Jones (16 December 2014). "Wonga cuts cost of borrowing, but interest rate still 1,509% | Money". The Guardian. Retrieved 13 April 2016.
  13. ^ "Ed Miliband Takes On The 'Wonga Economy'". Sky News. 5 November 2013. Archived from the original on 6 November 2013. Retrieved 7 November 2013.
  14. ^ "Wonga to pay redress for unfair debt collection practices". FCA. 25 June 2014. Retrieved 21 March 2021.