Since the collapse of the Payday loans company, Wonga, in August 2018, the mounting compensation claims against them have risen almost four times the original amount. Following this, the Treasury select committee have called for better protection for customers. According to Wonga’s administrator Grant Thornton in a letter provided to the Treasury select committee on Tuesday 5th March, there are more than four times the number of original complaints from customers who believe that they were mis-sold loans by Wonga. The figure stood at 10,500 complaints back in 2018 and has now grown to an enormous 40,000. This news comes after new complaints have arisen from Claims Management Companies (CMCs). Dave Dunckley, CEO at Grant Thornton UK LLP, stated that he expects the total number of complaints will increase even further when they write to all Wonga customers in the coming weeks regarding their potentially mis-sold loans. Exact details of the number of loans upheld, or the average amount that successful claimants could in fact receive will only be available in a report set to be released towards the end of March, according to Dunckley. Rather than manually evaluating each application, Grant Thornton UK plan to automate their claims proceedings against Wonga. Once all of the legalities of this operation are cleared, the administrators plan to launch an online portal to allow easy claims registration. This method will enable the company to report back on successful claims relatively quickly, however Dunckley wrote that the exact amounts awarded will not be decided “until all recovery of assets has been made”. This however, puts claimants in a position of uncertainty regarding whether this planned automation scheme will in fact allow their full compensation to be rewarded. In addition, as claimants are considered unsecured creditors against Wonga, they are more unlikely to receive full payouts as Wonga’s assets are distributed, being that they rank behind other secured creditors. Nicky Morgan, chair of the Treasury select committee said: “This problem is clearly much bigger than expected. It now appears that over 40,000 — and rising — may have an unresolved complaint about being mis-sold loans.” Morgan continued, “This issue raises questions about whether the coverage of the Financial Services Compensation Scheme should be widened to provide protection for customers of high-cost short-term lenders and those of firms that later go bust.” FCA Chief, Andrew Bailey, addressed some of Morgan’s concerns last month in a letter where he said that: “it is not proportionate to extend FSCS cover to high-cost short term credit activities.” He was referring to the FSCS scheme which guarantees customer deposits, savings and insurance products but not lending activities. His reasoning for this was that, “customers generally do not suffer losses resulting from the failure of [a] lender. Loan customers are more likely to owe money to the lender (rather than the other way around). For example, mortgage lending is also excluded from FSCS cover.” Moneyboat will continue to follow and update our readers on this story. We provide our customers with Wonga Loan Alternatives according to their needs and affordability.