Tiny payout for borrowers mis-sold payday loans

Tiny payout for borrowers mis-sold payday loans

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Borrowers mis-sold payday loans by a lender which later collapsed will receive less than 6% of the compensation they are owed.

WageDay Advance went into administration in February last year, after being flooded by claims.

In a case that mirrors that of Wonga, some 100,000 borrowers will receive 5.68% of their compensation entitlement, administrators say.

One of those receiving the payment said she was annoyed but not surprised.

Marie Ellis got into a spiral of debt after taking payday loans from WageDay Advance, Wonga and others to pay for day-to-day living costs.

She worked in film and TV marketing, which she described as “exciting, but low-paid”.

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Extra one-off costs meant she took on multiple and increasingly large loans.

“I was an adult and working to a budget, but the debt can snowball,” said Ms Ellis, who wrote a blog about her experiences.

Borrowers who were mis-sold a payday loan, because affordability checks had not been carried out properly, are entitled to redress.

This is made up of a refund of interest and charges they paid, as well as additional 8% of compensation.

Ms Ellis made a claim to WageDay Advance for being sold loans that were unaffordable, and was told she was entitled to £1,727 in compensation.

Now, following the final confirmation of payouts by the administrators, she will only receive £98.

“So many people got into such a mess. Generally, we feel annoyed about it,” she said.

“It is nice to have received something. We are a bit disgruntled, but you have to accept the situation.”

She has now worked to become debt-free.

https://www.intensedebate.com/people/atasehirli

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