Wonga
Payday lending at 5,853% APR attracts massive regulatory backlash.
2006 → 2018
$147M
Fintech/Lending
UK
IdeaProof AI Failure Score
What Happened: The Timeline
2006
Wonga founded in London
2012
Peak: £1.2B in loans issued, massive TV advertising
2014
FCA caps interest rates, tightens regulation
2018
Collapse into administration from compensation claims
Root Causes
Wonga offered short-term loans at annualized rates exceeding 5,000% APR. The UK-based company grew rapidly with aggressive advertising but attracted regulatory scrutiny. The FCA capped interest rates, required affordability checks, and forced Wonga to write off £220M in loans issued to customers who couldn't afford them. A flood of compensation claims pushed Wonga into administration in 2018.
Sources & References
Could This Failure Have Been Prevented?
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