Hundreds of thousands of Wonga customers who were mis-sold loans by the collapsed payday lender will only receive 4.3p for every £1 they are owed in compensation, administrators have confirmed.
The payout means more than 358,000 claimants who were owed a collective £460m, according to the last administrators’ report, will share less than £23m.
The average payout should have been £1,200, but customers will now receive an average of £64 each.
The administrators Grant Thornton started writing to affected claimants on Wednesday night, nearly 18 months after the lender collapsed in 2018.
Wonga was brought to its knees in August 2018 after a surge in complaints over excessive charges on historical loans that in some cases came with interest rates topping 5,000%.
Grant Thornton, which will have received more than £3m in fees for its work on the administration by the end of February, told customers in an email: “As you will be aware from previous correspondence to you, the payment you will receive is significantly smaller than your accepted claim value. This is because the total value of all accepted claims for customers/creditors significantly exceeds the money available to be shared out.”
Some victims were shocked by the minimal compensation. One former Wonga customer from Wiltshire who was owed £509 said he had been hoping to get at least half of the total, but would receive only £22. “To get [less than] a tenth of that is an outrage. In terms of finance, I was not banking on it as I felt I should not count my chickens, but it would of been a welcomed help to bills and other costs.”
He said he was disappointed at the small payout and had “a strong sense of injustice and anger that a company such as Wonga can get away with stealing from the vulnerable”.
Another Wonga customer, Luke, 29, from Burton, said he was “quite surprised” that the amount was so low. “They did say in the previous emails it would be considerably less, but to go from £400 owed to only receiving £17 was shocking.” A spokesman for Grant Thornton UK said: “As the joint administrators have explained throughout the course of the administration, the final dividend payment is significantly smaller than accepted claim values, owing to the fact that the total value of all accepted claims significantly exceeded the money available to be shared out.”
Customers will receive their payouts by the end of February.
