Home Inverness Colorado Income Chronology of Wonga: from the good start to bad debts | Wonga

Chronology of Wonga: from the good start to bad debts | Wonga

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Payday loan company Wonga announced a pre-tax loss of £ 37million, a big change from 2012 when the company made £ 62million.

Here is a timeline showing the rise of the business and how things have gone wrong in recent years:

2006: Company founded by Errol Damelin and Jonty Hurwitz

2007: Wonga launches beta version of its website

It offers loans up to £ 1,000 repaid after 30 days maximum. It promises almost instant decisions.

July 2008: Full launch. At this point, the company employs 37 people in London with a development team in Ukraine. Co-founder Damelin told The Guardian that 50,000 customers were served during our testing phase and that he expected to “help a lot more over the next 12 months.”

December 2010: Sponsorship of New Years Eve trip draws criticism. Campaigners, including Labor MP Stella Creasy, condemn the decision to let Wonga advertise on London transport in exchange for paying for transport overnight.

January 2011: Stella Creasy calls for cost of borrowing caps. Labor MP manages to get a vote against what she calls “legal usurers”. The resolution is rejected but calls for cost caps continue.

March 2011: Company named Guardian Digital Entrepreneur of the Year

June 2011: Stories are starting to emerge of struggling borrowers; in October the Observer explains how Wonga loaned money to a couple living on benefits.

October 2011: Jonty Hurwitz operationally resigns from the company and leaves.

January 2012: Wonga Withdraws Student Loan Information of its website after an outcry over a page telling students its service was more flexible than student loans.

February 2012: Office of Fair Trading Launches Review of Payday Loans. The regulator announces that it will investigate the top 50 lenders over fears that they are exploiting vulnerable people. Wonga is encouraged to make changes as a result of the investigation.

March 2012: The controversy grows around the company. He spends £ 16million a year on advertising, has made around 3.5million loans and claims his clients are web savvy people who choose not to use the big banks. But when the Guardian speaks to the very people Wonga proposes, it uncovers a different story.

May 2012: OFT finds that it accused troubled clients of fraud and told him to improve his collection practices. The same month he launches Wonga for businesses, offering business loans of up to £ 10,000 arranged over one to 52 weeks with an interest rate starting at 17%. The service never really takes off, he ends up changing his name, and was sold in February 2015.

September 2012: Reports that he tripled his income in 2011. Around 2.5million loans were taken during the year and Wonga’s net profit rose 269% to £ 45.8million on income of £ 185million.

November 2012: Abusive tweets to Labor MP attributed to Wonga employee. The lender must apologize after the Guardian finds out the source of the tweets sent to Stella Creasy.

January 2013: Bad debts start to increase with profits. It appears the company wrote off nearly £ 77million in bad debts in 2011, or 41% of its £ 185million revenue for the year and almost four times the 2010 figure.

March 2013 : Payday lenders receive reform ultimatum. The OFT gives lenders, including Wonga, 12 weeks to change their business practices after finding evidence of irresponsible lending and breaking the law.

July 2013: Archbishop of Canterbury speaks. Justin Welby says he wants to “compete” with Wonga with the credit unions.

September 2013: Reports profits of over £ 1million per week in 2012. The results show profits rose 36% to £ 62million with 1million customers in five countries taking loans. However, the write-offs increased to £ 96million with Wonga making a provision of £ 126million for write-offs.

October 2013: FCA announces stricter controls. The regulator describes a crackdown on the granting of loans and the way money is collected from customers that will go into effect in July 2014. Lenders will no longer be able to renew loans more than twice or make loans. repeated unsuccessful attempts to withdraw money from the bank of borrowers. accounts. These practices had made it less risky for lenders to offer money to people who might not be able to pay the repayments.

November 2013: George Osborne announces FCA will implement cost caps on lenders. In the same month company announces Errol Damelin will move to part-time position.

May 2014: New boss Niall Wass resigns after just six months on the job.

June 2014: £ 2.6million compensation bill for false credentials. The FCA notes that between October 2008 and November 2010, Wonga sent letters from bogus law firms to borrowers in arrears. The problem is referred to the police, but an investigation is ultimately excluded.

July 2014: New rules for payday lenders come into effect. The same month, Wonga appoints Andy Haste as president, who immediately ditch puppets and other light commercials, and says the business will become smaller and less profitable.

September 2014: Announces profits halved. Wonga claims to have made £ 39.7million in 2013, down 53% from 2012 earnings. Compensating customers for bogus letters cost £ 18.8million, Wonga says.

October 2014: Cancels £ 220million in loans to 375,000 borrowers. About 330,000 people who are over 30 days in arrears have debts written off and another 45,000 have interest and fees written off after the FCA discovered that Wonga had failed to verify that customers could afford the repayments. He is forced to change the affordability tests.

December 2014: VSuts its interest rate to comply with the new load limit. Interest rate reduced to 0.8% per day and other costs reduced to comply with a legal cost cap effective January 2, 2015.

February 2015: Company announces it will cut 325 jobs. Announces that it will cut a third of its workforce.

This article was modified on April 22, 2015 to correct the date on which Jonty Hurwitz left Wonga.