Wageday Advance borrowers ‘disgusted’ to get back just 5% of what they’re owed from mis-sold payday loans
"DISGUSTED" WageDay Advance customers will only get back roughly 5 per cent of what they're owed in compensation for mis-sold payday loans.
The lender's parent company, Curo Transatlantic Limited, went bust in February this year leaving 650,000 hard-up Brits in limbo.
Borrowers were then given until the end of August to apply for compensation, but only 100,416 claims were submitted out of an expected total of 256,000 eligible customers.
Sadly, if you missed the deadline, you won't be able to apply anymore and you won't get any compensation for mis-selling.
But even if you did, you'll only get between 4.5p and 5.2p per £1, administrator KPMG has announced.
It means someone with a compensation claim of £1,000 would only receive between £45 and £52.
The rate varies as it’s so far only an estimated figure, but all customers will get the same rate, KPMG said.
The issue is that borrowers are simply one in a long line of creditors owed cash by WageDay Advance.
Unlike payment protection insurance (PPI), payday loans aren't covered by the Financial Services Compensation Scheme (FSCS).
How to check if you were mis-sold a payday loan
YOU can claim compensation from a payday lender if the loan was unaffordable, even if you've finished paying it off.
Before a lender gives you a loan, it has to check whether you are able to pay it back.
For a payday loan to be affordable, you had to be able to pay it back the following month as well as pay your other bills and debts.
The loan was unaffordable if:
- you often rolled loans or borrowed again soon after repaying a loan;
- your loans from a lender were increasing in size;
- some repayments were late; or
- the loan was a significant part of your income.
Ask the lender for a copy of your loan details, such as when you took it out and how much interest you paid.
Compare it to your bank statements from the time you took it out and work out if you would have been able to pay back the loan after you paid your bills.
If you couldn't, you may be able to submit a compensation claim.
For customers who are due the compensation, you'll receive it directly to your bank account within nine months and by the end of May 2020 the latest.
You’ll get an email once the payment is made to confirm how much you’ll get.
Since the lender went into administration, roughly 5,000 customers have also overpaid on their loans.
These people will be notified by email and then paid refunds directly to their bank accounts shortly too, although KPMG couldn’t clarify a date.
Debt campaigner Sara Williams, who runs the Debt Camel website, told The Sun: "A reader on my website said yesterday that it's 'disgusting' how lenders can get away with this.
"There will be a hundreds of thousands of Wageday Advance and Wonga customers who agree with that."
She added: "Wageday Advance customers have been let down by the UK regulators.
"When a PPI firm went bust, everyone who was mis-sold PPI could get a full refund from the Financial Services Compensation Scheme.
"But customers who were mis-sold loans by payday lenders are not covered by the FSCS and will only get back a few pence in the pound. How can this be right?"
WageDay Advance customers with questions can contact KMPG by emailing customerservice.curo@kpmg.co.uk.
Most read in money
Wonga borrowers have less than one week left to claim compensation for extortionate loans, so we've rounded-up everything you need to know about submitting a complaint.
More than 50,000 CTL customers, including all Juo borrowers, have been sold to Shelby Finance, which is owned by Morses Club.
But beware of payday loan reclaim firms that "rip-off" customers by taking almost HALF of refunds.
We pay for your stories! Do you have a story for The Sun Online Money team? Email us at money@the-sun.co.uk