Maintaining Corporate Ethics

Running head: BUSINESS ETHICS
BUSINESS ETHICS
Name of the Student
Name of the University
Author Note

BUSINESS ETHICS1
Introduction
Maintaining corporate ethics has become mandatory for all the organisations in the
world. With the increase in number of financial scandals the implementation of ethical code
of conducts has been strictly imposed on the companies by the regulatory bodies and if the
companies fail to meet such obligations strict actions are taken against such companies. The
main objective of implementing the ethical standards is to bring more transparency in the
working environment of the entities and to protect the interest of the stakeholders. To prevent
the occurrence of financial scandals like Wonga the CII has set up a code of ethics in which
all the provisions that the organisations should follow are given in details. This initiative of
the CII has been a successful action to promote ethical behaviour in the corporate sector.
Discussion
Wonga which is engaged in the business of lending money to individuals has turned
up to be a very violent organisation that started to impose very high interest rate which
become a huge burden for the interest and become a toxic symbol of Britain’s household debt
crisis, the business of the company collapsed after a number of compensation claims raised
against the company. At the time of its dissolution an estimated 200000 customers is still
owning more than 400 million in short term loan. The borrowers have been asked to settle
their dues as it has been decided to sell Wonga’s business to another firm that used to provide
loan to the retail customers (Klepek 2016).
Since the occurrence of the case the regulatory authorities stated that the financial
conduct authority will supervise the operations of Wonga and will try to provide justice to the
customers, but at the same time the regulatory body make it clear that the borrowers still have
to repay their amount which they have taken from Wonga.

BUSINESS ETHICS2
The main objective of Wonga is to provide short term loan to the borrowers and gradually
charge such a high interest which is more than the 5853% which is later capped by FCA in
the year 2015 and that rate came down to 1500%. The consumer debt burden in Britain is
raised more than 200 billion in the form of various type of loans like, car, credit card or
personal loan, in this context the bank of England has given warning to the lenders that this
kind of behaviour of taking loan from unscheduled lenders can put them on trouble which
may include payment of high interest rate (Romero 2020).
When the organisation reached its peak position the company has been labelled as
morally wrong by the Church of England, beside that many other organisations also found
that Wonga is adipt5ing unfair and unethical practices of charging huge interest rate on their
clients and create huge financial burden on them. The main unethical practice that lead to the
collapse if Wonga is started in the year 2014 when the company started to provide forged
legal notices to its customers. Most recently some claim management firm stated to monitor
the activities of the company on several issues and lodged complaint against the company to
the financial ombudsman service (Fuzi et al 2019).
Wonga in the year 2015 face a loss when the government decided to impose a price
cap on their loan amount and this decision reduced the rate of interest to a maximum of 0.8%
per day this decision put a negative effect on the credit industry and Wonga along with other
lending companies has to suffer heavy monetary loss due to this (Bridgen and Naczyk 2019).
CII code of ethics
In order to curb the unethical behaviour of Wonga the CII has given a series of
proposal the first proposal is to being honest and open
In case of Wonga the main problem that arise is that they does not disclose all the
terms and conditions of the loan were not explained properly to the borrowers and how