Thousands of Wonga customers seeking compensation from the defunct payday lender have been “left to fend for themselves” as they fall out of the regulator’s remit, with MP Nicky Morgan suggesting the Government may have to step in.
Mrs Morgan, who chairs the influential Treasury Committee, has written to Grant Thornton, Wonga’s administrator, about the 10,500 people who had complaints open with the Financial Ombudsman Service (FOS) when the firm went bust last year.
Wonga collapsed in August after it was hit by a surge in people making compensation claims over historical loans.
Caroline Wayman, chief ombudsman at the FOS, told the Treasury Committee last month that customers who had open complaints will not be able to have their issues resolved.
In addition, they will not be entitled to get their money back as high-cost short-term credit firms are not covered by the Financial Services Compensation Scheme (FSCS).
Mrs Morgan previously wrote to the City watchdog to warn that vulnerable customers may be at a “significant financial disadvantage” as they can no longer claim through the FOS and are not eligible for compensation through the FSCS.
Andrew Bailey, chief executive of the Financial Conduct Authority, directed Mrs Morgan to Grant Thornton, saying former Wonga customers should apply to the accountancy firm for redress.
However, Mrs Morgan said customers have been “cast aside” with no regulatory authority taking responsibility to deal with the complaints, and opened up the possibility of Government intervention.
“It cannot be right that over 10,000 people who may have been missold loans are just cast aside, especially as many will be vulnerable consumers.
“These people have been left to fend for themselves by Wonga, the FCA and the FOS. They’ve been allowed to fall thought the cracks with nobody taking responsibility for their mistreatment.
“I have written to Grant Thornton, Wonga’s administrators, to understand how they intend to progress outstanding complaints against Wonga.
“If Wonga continues to damage people’s finances from beyond the grave, it may be time for the Government to intervene.”