Wonga

BensGrandad · Nov 6, 2013

With the amount of attention being focused on to the pay day loan companies and their high rate of interest should the radio and TV stations be banned from accepting their adverts. I think that perhaps that would be a positive step for the government to take.

Frutos · Nov 6, 2013

Scum as they are, as long as they conform to the requirements for showing their terms and rates as part of the advert (the small print), then there's really no justification for banning them.

Caveat emptor.

dougdeep · Nov 6, 2013

Anyone that uses these companies can't be very bright.

KZNSeagull · Nov 6, 2013

dougdeep said:
Anyone that uses these companies can't be very bright.

or desperate

El Presidente · Nov 6, 2013

They meet a need. What people should be asking is why the alternatives (Bank lending and credit unions) have failed to offer short term finance to a section of society.

dougdeep · Nov 6, 2013

But a lot of these people that take out loans to pay bills would be better off just not paying the bills. If you contact people that you owe money to they'll normally agree to wait or accept so much a month.

Gullflyinghigh · Nov 6, 2013

BensGrandad said:
With the amount of attention being focused on to the pay day loan companies and their high rate of interest should the radio and TV stations be banned from accepting their adverts. I think that perhaps that would be a positive step for the government to take.

Despite the well-publicised downsides of payday loan companies they still seem to do ok out of it, implying that there's a need to be met.

If the adverts (or companies themselves) were to be banned then you're likely to see an increase in people using (completely unregulated) loansharks instead.

They're the lesser of two evils I guess.

Racek · Nov 6, 2013

I heard that 100 quid loan for the month will cost you 10 quid. Does not seem bad to me if you pay them back on time.

Westdene Seagull · Nov 6, 2013

Steve2244 said:
I heard that 100 quid loan for the month will cost you 10 quid. Does not seem bad to me if you pay them back on time.

Borrow £500 for a year and you'll pay £23.5k in interest !

Blue Valkyrie · Nov 6, 2013

A payday loan is ok in isolation.

The problem is when people take out one to pay back another or find themselves with multiple loans which take up all their income, meaning more loans to pay other bills.

They need to be centrally registered and a maximum number enforced as to how many can be taken out at once.

piersa · Nov 6, 2013

My opinion is that although they are meeting a need, they are exorbitant in the way they do it because although their loans are available, they are generally taken out by people who are desperate or financially callow. In a recent which survey 7/10 people who took out a Wonga loan regretted it. That is not a good endorsement.

KZNSeagull · Nov 6, 2013

Steve2244 said:
I heard that 100 quid loan for the month will cost you 10 quid. Does not seem bad to me if you pay them back on time.

The South African version, R1000 loaned for 1 month will cost R1282.50. It is R1228.00 for 1 DAY!

Tricky Dicky · Nov 6, 2013

BensGrandad said:
With the amount of attention being focused on to the pay day loan companies and their high rate of interest should the radio and TV stations be banned from accepting their adverts. I think that perhaps that would be a positive step for the government to take.

I'm not sure the government could restrict trading like that for a company that is not breaking the law, as much as I detest the thought of them (and the need for them, if there is a need).

Gullflyinghigh · Nov 6, 2013

Tricky Dicky said:
I'm not sure the government could restrict trading like that for a company that is not breaking the law, as much as I detest the thought of them (and the need for them, if there is a need).

I thought that there were already numerous things that can't be advertised, despite being legal.

Cigarettes is the first one to come to mind but I'm sure there are others...

Tricky Dicky · Nov 6, 2013

Gullflyinghigh said:
I thought that there were already numerous things that can't be advertised, despite being legal.

Cigarettes is the first one to come to mind but I'm sure there are others...

Maybe, but that's a very specific product, I would think if they wanted to bans these, where would you draw the line for, say, Barclays ads.

Driver8 · Nov 6, 2013

Why are "pay day" loan adverts on daytime tv when people are at work?

The Large One · Nov 6, 2013

El Presidente said:
They meet a need. What people should be asking is why the alternatives (Bank lending and credit unions) have failed to offer short term finance to a section of society.

I'd say they created a need, specifically targeted at impatient aspirers attempting to live beyond their means without considering the consequences. Listening to the Commons Select Committee hearings yesterday (I know how to have fun) highlighted who the target market are, how the Payday Loan companies go for them.

People in real need shouldn't go anywhere near them, as their situation would only ever worsen.

Westdene Seagull · Nov 6, 2013

Rather than banning them advertising the government should put a cap on interest that can be charged for credit. Obviously it would kill most of the payday loan industry overnight though.

El Presidente · Nov 6, 2013

Westdene Seagull said:
Rather than banning them advertising the government should put a cap on interest that can be charged for credit. Obviously it would kill most of the payday loan industry overnight though.

I agree in theory, but they will circumnavigate this through the use of admin fees, arrangement fees, and rearrangement fees.

Odious entities, but there are a lot of stupid and desperate people out there.

Wonga are a very smart bunch of cookies, their bad debt ratio is the envy of many other financial institutions, as the algorithms they use whether to determine whether to grant a loan are very very accurate, even going as far as checking the browser used by the applicant.

Iggle Piggle · Nov 6, 2013

El Presidente said:
even going as far as checking the browser used by the applicant.

Just curious, how does that help?

On a wider note, It's easy to say only stupid people use them but I read an article in the Sunday Times whereby someone lost his job and it was his only means of credit was payday loans. He knew the pitfalls but had little other choice to get by in the short term. One of the old boys down the pub was talking about this last night and can't understand why people use them but its easy for him to come to that conclusion on a Final Salary pension scheme and mortgage free house.

You've only got to listen to the advert on a commercial radio station to see hear the shear amount of companies out there that there is a large market for this, sonmethings got to be down to drive down the extortionate interest rates.

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