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UK lawmakers call for better customer compensation when finance firms collapse

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UK lawmakers call for better customer compensation when finance firms collapse

The U.K.'s Treasury select committee suggested that customers should have better access to compensation when finance companies collapse, following a surge in the number of customers seeking compensation from failed payday lender Wonga Group Ltd., the Financial Times and Reuters reported March 12.

Wonga was placed under administration in August 2018 following a wave of compensation claims from former customers. Administrator Grant Thornton told the Treasury Committee that the number of customers with outstanding complaints had reached 40,000.

"This issue raises questions about whether the coverage of the Financial Services Compensation Scheme should be widened to provide protection for customers of high-cost short-term lenders and those of firms that later go bust," said Nicky Morgan, the committee's chair.