Tory MP Justin Tomlinson Suspended for Leaking Payday Loan Report to Wonga

As the FCA puts a tight grip on the UK payday loan industry, with interest rate caps and hefty fines to payday loan lenders found guilty of unfair lending practices, the displeasure seems to have started a long time ago from the highest levels of government.

Conservative MP Justin Tomlinson has been suspended for two days from the House of Commons for leaking a draft Public Accounts Committee (PAC) report. Mr. Tomlinson shared the findings of a draft report on regulating consumer credit with an employee of payday loan company Wonga back in 2013.

The ex-minister has been found guilty of ”committing a contempt” for leaking a draft parliamentary report. The incident happened back in May 2013 when Mr. Tomlinson was a PAC member and a DWP minister responsible for disabled people. 

An inquiry launched by the Standards and Privileges Committee investigated the matter and found the former minister’s action constituting to substantial interference with the work the public accounts committee whose main mandate at the time was protecting vulnerable payday loan borrowers from unfair payday loan lender practices. 

The final inquiry report recommended that Mr. Tomlinson apologises via a personal statement and then faces suspension from the House of Commons for two sitting days. 

Justin Tomlinson blames ”clouded judgment”

In his apology statement to the House of Commons, Mr. Tomlinson accepted he broke House rules but went on to claim that his judgment was clouded at the time of the leak. He stated that his true intention wasn’t to interfere with the work of the public accounts committee but to strengthen legislation on payday loan lenders in an effort to protect vulnerable consumers. 

In his statement, he claimed his actions were driven by a ”naive” desire to boost his contribution as a PAC member at the time. Mr. Tomlinson shared a confidential draft report on consumer credit regulation with a Wonga employee who replied with suggested amendments that he/she thought needed to be made on the report. He claimed he sent the report because he strongly believed that payday loan companies needed to be regulated further. 

Mr. Tomlinson went ahead and made a full and unreserved apology to the speaker and the House accepting the findings and recommendations of the Standards and Privileges Committee. 

The Commissioner for Standards has confirmed his claims of ”good intentions” stating that his actions and motivations were not intended on reflecting Wonga’s views or enjoying financial gain. This is based on the evidence available and the fact that Mr. Tomlinson has been on the forefront of protecting consumers. He has also been a strong supporter of tighter regulation in the payday lending industry for years now. 

Mr. Tomlinson was in agreement with other members of PAC at the time like chair; Margaret Hodge who accused some payday loans industry players of disgraceful practices. He however felt the need to do more (outside his mandate) since existing rules were ineffective in his own view.

The matter has since been laid to rest by the House speaker after Mr. Tomlinson accepted he broke House rules and apologies for it publicly.

Mr. Tomlinson was sacked as the disability minister back in July during Theresa May’s cabinet reshuffle. He hasn’t been offered another Government job.

People with disabilities have a higher probability of taking payday loans

The former DWP minister responsible for disabled people may have understood the importance of payday loans to people with disabilities. According to a research study done by Charity Scope, people with disabilities turn to payday loans more than people without disabilities. The study reveals that 18% of individuals with disabilities have already used payday loans while only 5% of non-disabled people have used the loans in the UK.

The state of the UK Payday loan industry today

These recent developments suggest that many people in the UK have seen a need for tighter regulation in the payday loan industry for years now. The current developments however suggest that the UK payday loan industry has improved drastically despite there being a drastic increase in the number of complaints. This is according to a survey done by Smart Money People. Payday lenders who have been found guilty of using unfair lending practices in the past are finally being brought to book. The most recent lender to pay for past wrongs is CFO lending. Just recently, the payday loan lender was ordered to pay its customers £34m for past unfair lending practices. 

Is the Company Director of Swift Money Limited.
He oversees all day to day operations of the company and actively participates in providing information regarding the payday/short term loan industry.

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