In a follow-up to previous posts on payday lenders and the Financial Conduct Authority (FCA), this post will serve as an update to demonstrate financial consumer protection enforcement powers in action.

On Thursday, the FCA announced that Wonga, the oft-cited controversial payday lender, would be writing off 220 million GBP of loans to more than 300,000 customers. This serves as an excellent example of a regulator, particularly a relatively new regulator, digging deeper and flexing enforcement powers when it comes to firms that are evidently predatory towards customers. It also demonstrates how regulators have multiple and escalating levels of enforcement, not simply punitive criminal charges. In this case, Wonga entered into a voluntary requirement (VREQ) agreement that also involves measures to improve the assessments completed on customers to determine whether its services are appropriate.

For more information, please refer to the FCA’s press release.