WORCESTER'S MP has revealed his delight at payday lender Wonga writing off £220 million owed by 330,000 customers - saying the company wrongly plunged "thousands of people into debt".

Robin Walker, who has waged his own campaign over rip-off lenders, says the staggering move is "a clear vindication" of MPs' efforts to clampdown on the system.

The company, which has faced criticism for its debt collection tactics, says after talks with regulators on its "lending practices" it has decided to write to the customers to cancel the debts.

A further 45,000 customers will not have to pay interest on their loans after they were handed cash before new stricter lending criteria came into force.

Mr Walker says during his time as Worcester's MP he's been shocked at the problems some city residents have got into after going to payday lenders.

Partly due to his lobbying to the Government, tighter regulation was brought in via the Financial Conduct Authority (FCA) on how they operate.

The FCA had been in talks with Wonga since June over who it lent money to and the criteria involved.

Mr Walker said: "This is a clear sign that this new regulatory regime is starting to work.

"Wonga clearly lent a huge amount of money it shouldn't have, this is major vindication of why these reforms are so important.

"We are talking about hundreds of thousands of people put into debt as a result of unreasonable lending, it's a pretty major climbdown by Wonga.

"There is still much to be done but this is a very good step forward."

Paul Griffith, from Worcester Municipal Charities, which helps vulnerable people, said: "This doesn't surprise me one bit, people become desperate and borrow money any way they can regardless of the interest rates, which can be 1,000 per cent.

"I am delighted with this news of the money being cancelled."

Wonga said its chairman Andy Haste, who joined the company in July, had been in talks with the Financial Conduct Authority (FCA) and agreed the need for change was "urgent".

"We want to ensure we only lend to those who can reasonably afford the loan in question and during my review, it became clear to me that this has unfortunately not always been the case," he said.

"This should put the rest of the industry on notice," said Clive Adamson, director of supervision at the FCA.

"They need to lend affordably and responsibly."

In June, Wonga admitted sending customers in arrears fake letters from non-existent law firms in an apparent attempt to scare them into repayments, and agreed to pay £2.6m in compensation.

* Have you been affected? If so email te@worcesternews.co.uk or call 01905 742248.