By Angelique Ruzicka, editor, Justmoney
The National Credit Regulator (NCR) has issued a compliance notice to Wonga Finance SA (Pty) Ltd for breaching the National Credit Act (NCA). The NCR investigation found that Wonga does not obtain proof of consumers’ income and living expenses and does not require supporting information or documentation to verify income and living expenses to determine whether consumers can afford their loans.
The National Credit Regulator (NCR) has issued a compliance notice to Wonga Finance SA (Pty) Ltd for breaching the National Credit Act (NCA). The NCR investigation found that Wonga does not obtain proof of consumers’ income and living expenses and does not require supporting information or documentation to verify income and living expenses to determine whether consumers can afford their loans.
The regulator added that consents to judgments issued by and/or on behalf of Wonga to consumers contain a clause which expresses, on behalf of consumers, consent to the jurisdiction of a court seated outside the area of jurisdiction of a court having concurrent jurisdiction.
The regulator also found that Wonga does not maintain and keep records of documentation in support of affordability assessments and the steps taken after default by consumers for the prescribed period of three years.
What must Wonga do now?
The notice requires Wonga to submit an audit report that confirms that Wonga has implemented systems and procedures to comply with the NCA in respect of these issues.
A spokesperson for Wonga said: "We received a compliance notice from the National Credit Regulator two weeks ago, which we take very seriously. We reviewed the letter with external advisors, who confirmed our view that we are fully compliant with the relevant rules. We have responded accordingly and requested a meeting. We commit to work with the NCR to resolve any concerns."
How does this affect you?
The notice requires Wonga to remove adverse credit bureau listings recorded on consumers’ credit records and also rescind judgments taken against consumers, at its own expense, on loans where Wonga did not obtain proof of consumers’ income and living expenses.
Where else has Wonga gone wrong?
The NCR’s investigation and compliance notice comes shortly after it was found that Wonga in the United Kingdom sent out fake legal letters demanding payment from customers who were in arrears with their loans. Wonga UK also charged their customers fees for these ‘legal services’. The Financial Conduct Authority in the UK ordered Wonga to pay £2.6m (over R46 million) in compensation to the 45,000 customers affected.
Kevin Hurwitz, CEO of Wonga South Africa told Justmoney that his business was not doing the same thing. Justmoney conducted its own investigation following emails from readers querying legal letters from Landau Attorneys, Black Fox Credit Management and Blake & Associates. But Justmoney has so far not found any fake legal letters being sent by Wonga SA.
Wonga confirmed that they have dealt with Landau, Black Fox Management and Blake & Associates. A spokesperson said: "Landau is indeed one of our DC agencies, as is Blake & Associates. Blackfox used to work for us, but we ended the relationship in April this year, and we removed most of our customer accounts from them then. They do still have a handful of accounts that they are working on our behalf – mainly those that they had managed to put repayment arrangements in place. They are absolutely a legitimate company, as are Landau & Blakes."
If you have any concerns regarding your Wonga loan contact their customer service centre on 0861966421.