Wonga boss to step down as new rules imposed

Multi-millionaire Errol Damelin, who founded the company, is believed to be leaving the post as a new City regulator prepares to impose tougher rules

Wonga founder and CEO Errol Damelin
Wonga founder and CEO Errol Damelin

The man at the helm of Wonga when the controversial payday lender agreed a four-year sponsorship deal with Newcastle United is reported to be stepping down in the coming months.

Multi-millionaire Errol Damelin, who founded the company, is believed to be leaving the post as a new City regulator prepares to impose tougher rules.

The 44-year-old has been forced to defend the company repeatedly from political attacks and public outcry.

Criticised by the Labour MP Stella Creasy for “legal loan-sharking”, Wonga charges interest at 5,853% APR.

Damelin’s exit comes as new City regulator, the Financial Conduct Authority, prepares to impose tough rules to prevent payday lenders preying on struggling families as it takes control of the industry.

The FCA has promised take a “hands on” approach to regulating Wonga and other payday lenders, including unannounced visits to companies’ offices to inspect how they handle defaults and examine adverts and promotions.

Damelin is said to be particularly frustrated about the company being referred to as a legal loan shark, suggesting it should be regarded as a technological innovation, rather than a money lender. He has even referred to it as Britain’s version of Facebook, Amazon and Apple.

In North East circles, Wonga’s sponsorship of Newcastle United has been controversial from the start. While some close to the club have suggested the agreement has brought numerous benefits, others have been vocal in their criticism, with player Papiss Demba Cissé objecting to wearing the firm’s logo on religious grounds.

Wonga also sponsors the Blackpool and Heart of Midlothian football clubs.

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