06 October, 2014
Short-term lenders shouldn’t be tarred with the same brush as Wonga after the payday lender was forced to write off 330,000 loans for failing to assess affordability, Russell Hamblin-Boone, chief executive of the Consumer Finance Association, has said.
Following the Financial Conduct Authority’s decision to force Wonga to repay the loans there has been speculation that millions of other payday loan customers could have their debts written off.
However Hamblin-Boone said: “It would be wrong to assume that all lenders’ affordability assessments have fallen short of the mark.
“Every firm operates differently and has distinct business models.
“CFA members are subject to the same laws as all credit providers and there is no suggestion that they have acted illegally.
“Therefore any decision to make compensation payments is down to each company and they will assess individual claims on case by case basis.”
He said he is unaware of any CFA members being challenged on previous lending, adding that his members comply with the association’s code of practice, which paved the way for the FCA’s new rules.