Wonga customers face massive hit to payouts

Customers of payday lender Wonga who were mis-sold loans may only get back a fraction of the payout they are owed.

Administrators of the collapsed lender revealed that only £41m will be put aside for claimants, the Guardian reported on Wednesday .

The report also revealed plans to sell Wonga's loan book had been dumped, over doubts that bidders met the criteria, including properly approaching customers for debt payments on outstanding loans.

Wonga collapsed in 2018 after a spike in complaints over excessive charges on historical loans that in some cases came with interest rates topping 5,000%.

Customers have lodged 560,982 claims over their treatment by Wonga at the end of August this year and 389,621 of which are eligible for redress payments. That number is expected to have risen up to the time the claims deadline closed at the end of September.

Administrators at Grant Thornton said the average claim was for about £1,181, and that the average payout could be worth just £118. There are plans for the claims to be paid by the end of January 2020.

(Editing by Frank Prenesti)