CAMBRIDGE – Payday lender Wonga has announced that it is writing off £220m of debts for 330,000 customers. Changes have been made to their affordability checks after discussions with the FCA, its new regulator.
Wonga’s chairman Andy Haste was quoted as saying “We want to ensure we only lend to those who can reasonably afford the loan in question and during my review, it became clear to me that this has unfortunately not always been the case”.
Although it’s good to see a payday lenderdoing the right thing, albeit under pressure from a regulator, better guidance on debt is called for to prevent the harm that indebtedness can cause.
Often the narrative surrounding debt is focused on it being a solely financial issue, overlooking things like the relational impact it can have. Because debt affects things like where we live, how long we work for, how much time we spend with our families and the levels of stress we face. It has a fundamental effect on our relationships and our wellbeing at large.
For 330,000 households there will be a moment of relief and Wonga is reviewing its policies. That is good news. However, a discussion is still badly needed on questions around debt, on how we live and how we work; on what actually should be a last resort in solving the issue of poverty.