Even on a day like today, Wonga co-founder, Errol Damelin, certainly ain’t no fool.
In what seems to be a complete coincidence (cough), Damelin, former three-time entrepreneur of the year, has reportedly decided to step down as chairman just as the responsibility for regulating short-term lenders passes from the Office of Fair Trading (OFT) to the Financial Conduct Authority (FCA).
As reported by Sky News, inside sources at Wonga have revealed that Damelin had been planning on stepping down for some time. It comes as the company makes the full transition from being a data and technology-led company to a fully regulated financial institution. However, it is believed he has been persuaded to remain as a non-executive director pending lengthy decisions with other board colleagues.
The move also comes amid speculation that all is not well in the world of Wonga, with alleged battles between shareholders over the direction of the company as well as apparent tensions between former Tech City guru Damelin and other company directors.
From today, the FCA will be responsible for regulating the consumer credit market, which is worth around £200bn. And with 50,000 businesses offering some sort of credit to UK consumers – 9 million of whom are in debt – it’s not exactly going to be a walk in the park.
Martin Wheatley, FCA chief executive, said: “We have a big task ahead; it’s our job to make sure firms put their customers at the heart of their business and don’t just see them as an easy target or a profit line.
“We won’t shy away from taking tough, decisive action to make sure that the people who rely on these products are treated fairly. There will be some firms that don’t get the message, or won’t play ball, those firms should know that we won’t let them carry on.”
The shift in responsibility from the OFT to FCA will also provide the latter with powers to ban advertising and impose a cap on interest rates charged by lenders – leaving companies that choose to impose extortionate fees shaking like a Wonga puppet in a room full of chainsaws.