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<p>The Government has fundamentally reformed regulation of the consumer credit market.
The transfer of regulatory responsibility for consumer credit from the Office of Fair
Trading (OFT) to the Financial Conduct Authority (FCA) took effect in April. The FCA
has stronger powers and is far better equipped to protect consumers than the OFT.</p><p>
</p><p>Wonga has voluntarily agreed to pay compensation totaling more than £2.6m to
around 45,000 customers in relation to unfair debt collection practices between 2008
and 2010. The requirement agreed by Wonga is available at <a href="http://www.fca.org.uk/your-fca/documents/requirement-notices/wonga-group-limited-vreq"
target="_blank">http://www.fca.org.uk/your-fca/documents/requirement-notices/wonga-group-limited-vreq</a>.
Had Wonga not agreed, the FCA could have used its powers to impose requirements. Wonga
will appoint a skilled person (as specified under section 166 of the Financial Services
and Markets Act 2000) to ensure that affected customers receive appropriate compensation.</p><p>
</p><p>More generally, the Government has ensured that the FCA has inherited the OFT's
powers (both criminal and regulatory) in relation to misconduct which occurred before
1 April 2014, as well as considerably strengthening the FCA's powers in relation to
misconduct which occurs under the new regulatory regime.</p><p> </p><p>The FCA has
the same powers as the OFT had to investigate and prosecute offences under the Consumer
Credit Act 1974.</p><p> </p><p> </p><p>The FCA has also inherited the OFT's power
to fine, although the OFT's power to fine under the Consumer Credit Act was limited
to fining a firm for breaches of a requirement imposed by the OFT (and the maximum
penalty in this regard was £50,000). The Government has already strengthened the new
regime by giving the FCA the ability to impose unlimited fines for breaches of regulatory
requirements that take place after 1 April 2014.</p>
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