Credit Unions of Wales response to WageDay Advance compensation collapse
Credit Unions of Wales are warning people not to fall victim to payday lenders following news that hundreds of thousands of people will receive a fraction of the compensation they are entitled to after the collapse of payday lender WageDay Advance.
The company went into administration after facing more than £220million of compensation claims for mis-sold loans. It’s been revealed that many of those people will receive a fraction of the compensation due.
General Manager of Treorchy-based Dragonsavers Credit Union Christina Stoneman said: “Unfortunately far too many people, particularly in Wales, see payday lenders as the simplest way of getting their hands on money as quickly as possible, without realising the long-term financial heartache this could cause.
“WageDay Advance caused untold anxiety to its borrowers and the impact is still being felt by many thousands of them.
“As financial co-operatives, Credit Unions of Wales, offer fair and ethical loans at lower rates that payday lenders.”
WageDay Advance gave loans to about 800,000 people, administrator KPMG has warned that those who are entitled to compensation may only receive a fraction of the full compensation pay-out.
Fears over the level of personal debt built up by individuals continues to concern.
According to the Money Advice Service people in Wales are more susceptible to over-indebtedness than elsewhere in the UK, with 440,000 at risk of being unable to keep up with credit repayments.
Christina Stoneman added “The rise of high cost credit such as rent-to-own providers and payday lenders is a major factor in why personal debt is on the rise.
“But as ethical borrowers, credit unions are bucking this trend by offering members far more affordable loans that are tailored to suit individual need and whether they can keep up with the repayments.”