Payday lender regulations to leave Wonga among the 1pc still standing
A shocking 99 per cent of Britain's payday loan companies face oblivion next year under new guidelines.
The Financial Conduct Authority (FCA) is bringing in a new cap on credit under new, stricter guidelines. The tough new approach has already forced Wonga to write off the debts of 330,000 customers.
Wonga saw its profits halve this week, and it is considered unlikely that most will be able to survive the tough new conditions. Many lenders have been forced from the market already.
Payday lenders claim that they are providing a service and that the high-interest rates often quoted are reported out of context and loans are paid back too quickly for annualised rates to be relevant.
Critics claim the companies are exploiting people in difficulty. The Office of Fair Trading has said that one in four loans were not paid back on time, leading to higher rates.