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    Wonga whacked

    I thought we had a Wonga/payday lender thread, but it's not showing up. Anyway, the FCA has just handed down (technically, agreed) its redress measures/punishment for Wonga failing to assess affordability. Basically everyone now more than 30 days in arrears is having their debt written off, while everyone else in arrears won't have to pay interest. That's pretty dramatic and basically slashes Wonga's balance sheet to the tune of £220m.

    #2
    Wonga whacked

    Yes, a rare bit of good news.

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      #3
      Wonga whacked

      Outstanding.

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        #4
        Wonga whacked

        Wonga were reported as having approximately 1 million customers. Which throws this number into somewhat startlingly context (as if 1/3 million people in debt was startlingly enough);

        •Approximately 330,000 customers who are currently in excess of 30 days in arrears, will have the balance of their loan written off and will owe Wonga nothing.

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          #5
          Wonga whacked

          This bit is interesting, though.

          Wonga will be contacting all customers by 10 October to notify them if they will be included in the redress programme. Customers should now continue to make payments unless they are told to stop by the firm

          Wouldn't it make sense to stop paying? If they are charging no interest if you are in arrears, and wiping out the whole thing if you are over 30 days, then surely ceasing paying them now makes lots of sense. Presumably they and the FCA have thought of that.

          Maybe that is what this is about;

          Borrowers who are experiencing financial difficulty, should contact Wonga to discuss their options.

          i.e. if you have been selling everything not nailed down to make the payments and are now sitting there feeling utterly depressed that you are being punished for your willingness to obey the rules, there may still be some redress.

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            #6
            Wonga whacked

            Basically the people who are less than a month in arrears still have to repay the principal, but will get up to four months to do so. I haven't seen it specified whether that's lump sum or amortising.

            i.e. if you have been selling everything not nailed down to make the payments and are now sitting there feeling utterly depressed that you are being punished for your willingness to obey the rules, there may still be some redress.
            Indeed. If you can establish (or maybe even argue) they didn't assess affordability, the logic and scale of the redress suggests you should get some relief too.

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              #7
              Wonga whacked

              Is there reason to believe that Wonga were worse than the other payday lenders in this particular respect?

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                #8
                Wonga whacked

                ursus arctos wrote: Is there reason to believe that Wonga were worse than the other payday lenders in this particular respect?
                I know someone (genuinely someone else, not code for "Me") who worked as a software developer for their website. He left after a few months. Some of the anecdotes he left with are... not pleasant.

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                  #9
                  Wonga whacked

                  Stiff regulation would end these hideous lending practices. Banks should be legislated to provide no-cost banking for sub-poverty clients, including check-cashing and maybe even payday loans (with caveats). The whole industry is shit.

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                    #10
                    Wonga whacked

                    Hear, hear.

                    It is absolutely predatory.

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                      #11
                      Wonga whacked

                      There's a great article on Longform about the dirtbag czar of the whole industry. I'll try to dig it up.

                      http://www.alternet.org/story/147451/meet_the_man_who_made_a_fortune_exploiting_the_poo r_with_payday_loans

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                        #12
                        Wonga whacked

                        Is there reason to believe that Wonga were worse than the other payday lenders in this particular respect?
                        Yes and no. Payday lending is just inherently rotten, so it's going to attract bad operators. But, even given that, Wonga seems to have been terribly managed for a large regulated company and in a way that was very detrimental to its borrowers. They don't even seem to have done the usual British comply-with-the-letter-but-not-the-spirit approach. I've never seen the FCA take compliance action of this type, or on this scale before relative to the amount of lending. I wouldn't be surprised if the redress amount here is more than all the arrears management redress fines ever applied to a UK lender combined.

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                          #13
                          Wonga whacked

                          They opened here with a bang, but they've gone very quiet over the last few months. I suspect people are probably pretty comfortable with their usual bricks 'n mortar locations.

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                            #14
                            Wonga whacked

                            Rambles Off Topic wrote:
                            Originally posted by ursus arctos
                            Is there reason to believe that Wonga were worse than the other payday lenders in this particular respect?
                            I know someone (genuinely someone else, not code for "Me") who worked as a software developer for their website. He left after a few months. Some of the anecdotes he left with are... not pleasant.
                            The gambling industry's not a heap better. Some real dickheads.

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                              #15
                              Wonga whacked

                              I think I owed them money. Don't suppose I have to worry about whether I do or not any more. Supoib.

                              It's an easy spiral to get into, but a difficult one to get out of. I managed it (I think), but a very close friedn of mine gets paid every month, and on her payday loses all but about £100 of her wages. And she's not on a bad wage at all. All of which sends her back to the payday loan companies. It's horrible and there's little you can do about it.

                              It has the same dehumanising, claustrophobic and depressing effects as an addiction. I wish these companies nothing but pain, torture and elimination.

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                                #16
                                Wonga whacked

                                Hey man, remember the lesson of Papiss Cisse- if you've ever placed any sort of bet, on anything, in any context, you've no right to criticise Wonga.

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                                  #17
                                  Wonga whacked

                                  I remember some ridiculous IDS Think Tank shit about downmarket lenders. They were very keen not to limit the interest rate.

                                  That Christian soul of his. They can lose their charitable status, they Policy Exchange, New Shools Network, the lot.

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                                    #18
                                    Wonga whacked

                                    The gambling industry's not a heap better. Some real dickheads.
                                    I have only recently begun doing work for a major "gaming" company.

                                    It's problematic.

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                                      #19
                                      Wonga whacked

                                      Worst industry you've had clients in?

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                                        #20
                                        Wonga whacked

                                        I've had occasion - professionally speaking - to deal with bailiff firms.

                                        Horrible, vile people.

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                                          #21
                                          Wonga whacked

                                          The debt collection industry is vile and relies on people being scared into compliance.

                                          People need to know their rights: bailiffs can't enter without a court order, debt agencies cannot harass you, doorstep you or contact your neighbours/place of work.

                                          Oh yeh, and a debt becomes unenforceable after six years if you don't acknowledge or pay anything on it.

                                          They should teach this in schools, would only take half an hour.

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                                            #22
                                            Wonga whacked

                                            Someone I worked with in the Home Office had to deal with people involved with boxing, when there was the controversy over Tyson being allowed in with a rape conviction.

                                            It was all "Just put me through to the boss" and "You don't understand, we've sold tickets for it".

                                            Possibly some overlap with debt collection.

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                                              #23
                                              And now completely whacked...

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                                                #24
                                                I noticed their brand new adverts on a billboard yesterday, talking about their cashback scheme.

                                                I wonder if they've paid for their ad space.

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                                                  #25
                                                  Reading E1M's posting. Yes it is a horrible spiral but for many people on or below the poverty level there may not be anywhere else to go. That is what the sharks rely on. People that are so desperate that they have to stomach the most outrageous interest rates. Some states have anti usury laws (Arkansas is one, I think) but they are not usual.

                                                  As for debt collecting, in New Mexico they can do pretty much as they please. Some debt collectors double as bounty hunters and bounty hunters can, literally, get away with murder.

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