Over a million consumers are thought to be still owed compensation by payday lenders such as Wonga and Quick Quid.
The Financial Conduct Authority (FCA) ordered the lenders to make amends to borrowers who had been dragged into further debt before a cap was imposed on the industry’s charges in 2014.
However, compensation experts claim that the payday companies have been dragging their heels over paying back customers who were charged sky-high rates on short-term loans they had no hope of paying back.
Pay Day Refunds, a company engaged in obtaining refunds due to consumers confirmed that it is handling 32,000 customer claims.
Vincent Vernon of Pay Day Refunds said: ‘There could be in excess of a million customers who have suffered as a result of irresponsible lending who are owed money back.’
He continued: ‘Three of the poorest-responding lenders are Wonga, Curo and Quick Quid. These lenders are continuing to ignore UK consumer rights towards their irresponsible lending. They’re fast to lend and extremely slow to repay.’
James Walker, from complaints service Resolver, added: ‘Of all the mis-selling scandals of recent decades, the millions of payday loans flogged to hard-up people struggling to make ends meet is both tragic and outrageous.
‘Astronomical loans were sold, with little to no checks, leaving desperate people averaging seven loans each at any given time and borrowing to pay off their other loans. Every loan carried huge interest that often made debt worse.’
Mr Walker also claimed that payday companies are shutting down customers’ online accounts to make it more difficult for them to claim.
However, this does not mean that customers cannot claim. The companies must keep records of loans for a minimum of six years, and many keep the records for longer.
Wonga, who had to call on financial backers for £10 million recently to stay afloat, said: ‘We assess customer claims on a case-by-case basis. In line with regulatory standards, it can take up to eight weeks before a claim is processed.’