Wonga, the top payday loan provider in the United Kingdom, continues to diminish its reputation. The latest scandal consists of taking out additional payments from its customers’ bank accounts.
According to the payday lender, it double-charged an estimated 7,000 customers for their payday loans on Friday. This mean that many of its clients were unable to pay their bills on the final day of the month. Wonga blames the incident on an “internal system error.”
The British firm confirmed that it will work diligently to refund extra costs and additional charges that customers have incurred. Wonga did concede, however, that this process may take a few working days. This isn’t good for the large number of customers who are cash-strapped and will have direct debits and mortgage payments debited from their checking accounts in the same week.
“We experienced an internal system error on Friday morning which resulted in Flexi Loan payments being debited twice from some customers,” the company said in a statement. “We notified all those affected and took action to credit the right amounts back to customers on Friday. We apologize for the inconvenience caused.”
Not all payday loan borrowers were affected. The only customers that have been harmed in the situation were customers who took out Flexi loans. These are short-term, high-interest loans that have to be repaid in three instalments over the course of three months. Therefore, if you have borrowed one of these loans then you will need to check your bank account to determine if you’ve been double charged.
Also, if you were impacted by the systems glitch then you have or will receive a text message from Wonga. The text message, which was sent out on Friday, contains a warning that you might have been overcharged on your repayment.
Many are wondering if they will receive compensation for being double charged, especially if they have other financial obligations and pecuniary responsibilities. Mirror Online checked with Wonga:
“Mirror Online asked Wonga if compensation will be paid out to those affected by the repayments glitch – however the firm said this will be dealt with on a case-by-case basis,” the newspaper reported.
“Wonga has confirmed that they will cover the costs of any charges incurred due to the error, for example fees received as a result of not paying your bills on time, or fees incurred as a result of having to use a credit card instead.”
Ever since the Financial Conduct Authority (FCA) waged war on the payday loan industry, Wonga has been significantly impacted. The FCA has imposed new rules and regulations for payday loan operators.
Wonga, which has quickly become one of the most controversial payday lenders in the country, reported a loss of more than $40 million in 2014. This is a stark contrast from its $40 million profit in 2013. It also experienced a $40 million loss after it had to cancel debts owed by more than 300,000 customers.