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The Wonga had already experienced difficulties after regulatory authorities introduced a ceiling in 2015 on the interest rates they and others in the sector could demand for credit. She said Wonga claimed that about 20 per cent of Allegiant's current operations are about 20 per cent, and added that she expected the industry's focus to be on her competitors after Wonga's death.
A major benefit for the claim settlement sector is the mis-sold money support scheme (PPI) - Britain's most costly bank fraud, with British creditors paying GBP billion in damages. However, a ceiling on the charges that claim managers can bill companies in PPI appeals and an approach period of August 2019 to file these claims have caused many to relocate their emphasis to payday lending, Marshall said.
"These are just the initial pistol for badly oversold credit, and it defines the countryside after PPI," she said, and added her firm planned to begin handling auto home loan limits raises and door step loan entitlements. The UK's ombudsman service, which resolves consumer and finance dispute, reported 10,979 payday cases in the first three months of this year, an improvement of 251 per cent over the same prior-year figure.
Cashheuronet UK LLC, another large payday UK creditor who owns the US company Enova International Inc (ENVA. N) and owns trademarks such as QuickQuid and Pound to Pocket, has also seen a significant rise in the number of claims since 2015. Figures released by the company and the Financial Conduct Authority show that the number of appeals lodged increased from 9,238 in 2015 to 17,712 in the following year and 21,485 in the first half of this year.
On its website Wonga said that in the first six month of 2018 it got 24,814 appeals. Enova International said in its second quarterly earnings statement released in July that the increase in the number of appeals had resulted in significant expenses and could have a "significant negative impact" on the company's results if operations continue. Labor legislator Stella Creasy demanded this weeks to extend the interest ceiling to all types of loans and urged businesses such as the guarantee company Amigo Holdings (AMGO. L) and Provident Financial (PFG. L) to "legal loan sharks".
Amigo CEO Glen Crawford said his clients are not at risk of financial collapse or overindebtedness and will use their credits to make prudent acquisitions such as purchasing a vehicle. "The Amigo offers a viable and accessible mid-cost loan to those rejected by the banking community long before the development of the payday market," he said in a declaration.
Commenting on Friday, Fitch Ratings said the payday credit scheme, which in the UK after the recent economic downturn seems "no longer viable", was growing fast. They expect creditors focusing on high-priced uncovered credit to adjust their businesses to less expensive credit for more secure debt.