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Gone into administration. 

What a disgraceful company it was. Got to feel for the general staff who now have to find a job, but surely this was karma at its very best!

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I am very glad I never found myself in a situation where loan sharks such as Wonga were my last option. Horror stories from beginning to end.

Tough on their staff, of course, but if this is the beginning of the end for the more avaricious type of lenders, maybe someone will see the gap in the market and launch a less grasping kind of replacement.

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What happens to the venture capitalists and moneymen  who were behind it ?

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8 minutes ago, DavidM said:

What happens to the venture capitalists and moneymen  who were behind it ?

Presumably they will lose their investments  

It will take a while for the final position to be reached as all the existing loans will have to run their terms 

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14 minutes ago, LeeF said:

Presumably they will lose their investments  

It will take a while for the final position to be reached as all the existing loans will have to run their terms 

That’s a shame then after fleecing people in desperate need to make even more money . If I’d known earlier I’d have lent them a few quid , at 4000%

Edited by DavidM

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4 hours ago, DavidM said:

That’s a shame then after fleecing people in desperate need to make even more money . If I’d known earlier I’d have lent them a few quid , at 4000%

http://newsthump.com/2018/08/27/wonga-close-to-collapse-after-accidentally-borrowing-a-fiver-from-itself/

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While I've very little sympathy for companies like Wonga going bust -they lend irresponsibly - ultimately people need to stop borrowing money off companies like this and they won't prosper.

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2 minutes ago, Johnoco said:

While I've very little sympathy for companies like Wonga going bust -they lend irresponsibly - ultimately people need to stop borrowing money off companies like this and they won't prosper.

I get your point but there are a lot of very desperate people out there.  When you're getting told you're not getting benefit money for six weeks and you know there's not enough cash left to do you, then someone offering "easy money" is very tempting as tomorrow's problems in repaying it are not today's.  Unfortunately, that's the effective target market for many of these companies.

All they are is effectively modern versions of the shops at the edges of high streets where you could go and issue a post-dated guaranteed cheque in return for a not-inconsiderable fee.  They'll always exist because people don't want to look for root causes.

Yes, there are quite a lot of people who have enough money to survive but urinate it all away and then complain about how these people have ripped them off, but they have to be separated from the genuinely destitute that our nation hopes we don't see too often.

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Sadly the others havent gone away , whilst the govt brought in very tight rules on payday lenders they havent regulated other lenders inthe same way. That means a credit card can charge you more apr than a payday lender and it is why some of the providered have "diversified" into credit cards for those with poor credit ratings - especially by asking for guarantors to get around the rules on checking affordability.  For example Vanquis is owned by Provident (and also marketed under various other names)  https://www.moneysavingexpert.com/news/cards/2018/02/vanquis-bank-to-pay-customers-more-than-168-million-in-compensation

 

Also i heard that the debts owed by Wonga will not be expunged as they are the only asset the administrator has really so it will be a case of debtors still needing to pay but maybe not getting outstanding compo

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3 minutes ago, ckn said:

I get your point but there are a lot of very desperate people out there.  When you're getting told you're not getting benefit money for six weeks and you know there's not enough cash left to do you, then someone offering "easy money" is very tempting as tomorrow's problems in repaying it are not today's.  Unfortunately, that's the effective target market for many of these companies.

All they are is effectively modern versions of the shops at the edges of high streets where you could go and issue a post-dated guaranteed cheque in return for a not-inconsiderable fee.  They'll always exist because people don't want to look for root causes.

Yes, there are quite a lot of people who have enough money to survive but urinate it all away and then complain about how these people have ripped them off, but they have to be separated from the genuinely destitute that our nation hopes we don't see too often.

when i was at uni my girlfriend got herself into a heap of debt - she had exceeded her overdraft and knowing the machine would have eaten her card she would instead go to the corner shop that would allow her to write a cheque to them for £11 using her card as a cheque guarantee card and then give her £10 cash. with charges etc she turned a £250 overdraft limit into a £1k debt in 2 months without really spending excessively as each of those £10's was likely costing her close to £30 just in the extra £1 to the shop and the the fine for issuing a cheque when over overdraft limit - we split up very shortly after than and she dropped out of uni

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31 minutes ago, ckn said:

I get your point but there are a lot of very desperate people out there.  When you're getting told you're not getting benefit money for six weeks and you know there's not enough cash left to do you, then someone offering "easy money" is very tempting as tomorrow's problems in repaying it are not today's.  Unfortunately, that's the effective target market for many of these companies.

All they are is effectively modern versions of the shops at the edges of high streets where you could go and issue a post-dated guaranteed cheque in return for a not-inconsiderable fee.  They'll always exist because people don't want to look for root causes.

Yes, there are quite a lot of people who have enough money to survive but urinate it all away and then complain about how these people have ripped them off, but they have to be separated from the genuinely destitute that our nation hopes we don't see too often.

However, it's not just the desperate who use pay day loan companies.  All it takes is for a surprise expenditure to come along to someone on an average salary and that can create difficulties, for example the washing machine breaking.  A pay day loan is very helpful at that point as banks will not necessarily lend for that sort of outgoing.  On one report a few days ago anecdotal evidence was referred to of an increase in thefts following the introduction of legislation tightening up the practices of pay day loan companies.  There is a need for short term credit.  

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28 minutes ago, Saintslass said:

However, it's not just the desperate who use pay day loan companies.  All it takes is for a surprise expenditure to come along to someone on an average salary and that can create difficulties, for example the washing machine breaking.  A pay day loan is very helpful at that point as banks will not necessarily lend for that sort of outgoing.  On one report a few days ago anecdotal evidence was referred to of an increase in thefts following the introduction of legislation tightening up the practices of pay day loan companies.  There is a need for short term credit.  

They do fill a need for emergency funding but they don't half take their pound of flesh while doing so.

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All these companies popping up , and food banks and the like , despite the tories with their austerity policies performing such an economic miracle since 2010

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13 minutes ago, ckn said:

They do fill a need for emergency funding but they don't half take their pound of flesh while doing so.

precisely….and at least they are one rung of the ladder above illegal loan sharks and their method of working. The next bit should probably be in the rant thread: why are all unsecured (credit cards, bank loans etc etc) loan interest rates so bloody high?

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1 minute ago, JohnM said:

precisely….and at least they are one rung of the ladder above illegal loan sharks and their method of working. The next bit should probably be in the rant thread: why are all unsecured (credit cards, bank loans etc etc) loan interest rates so bloody high?

The other thing that people don't really get that having a pay-day loan taints your credit record for 6 years meaning they're about all that'll loan to you from that point on. The "big" lenders who do the low rates will see Wonga on your record and automatically score you down heavily.

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makes you wonder why Credit Unions are not more popular. I get the risk issue re credit record and I am sure  there are those with Wonga loans who now (wrongly)  think they wont have to pay anything back. Must be hard when you see mortgage interest rates as low as 1.7% on a 2 year fix. 

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20 minutes ago, JohnM said:

precisely….and at least they are one rung of the ladder above illegal loan sharks and their method of working. The next bit should probably be in the rant thread: why are all unsecured (credit cards, bank loans etc etc) loan interest rates so bloody high?

I'd be interested to see the levels of defaulting on these loans before I strapped myself into the Outrage Bus, althoug hI have made a reservation. John, can you keep a seat free for me?

 

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Done...but please note I have a bus pass.😃   I guess the default rate is high and that is the justification of high interest rates. Plus I think legislation requires any arrangement fee or admin fee be wrapped up along with the loan interest rate to arrive at the advertised rate. Don't think this is the case with mortgage rates.

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2 minutes ago, JohnM said:

Done...but please note I have a bus pass.😃   I guess the default rate is high and that is the justification of high interest rates. Plus I think legislation requires any arrangement fee or admin fee be wrapped up along with the loan interest rate to arrive at the advertised rate. Don't think this is the case with mortgage rates.

Thanks mate, I've got the Tartan Thermos. 😁

As these are generally low value loans adding in an arrangement fee will have a much bigger result than on a Mortgage 

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1 hour ago, Shadow said:

Thanks mate, I've got the Tartan Thermos. 😁

As these are generally low value loans adding in an arrangement fee will have a much bigger result than on a Mortgage 

which is why i mentioned by ex who was paying £30 for each £10 due to the charges/fines. But equally someone said on the radio the other day, if I borrow a tenner form you and next week give it back and buy you a pint - looked at in APR terms that is a huge interest fee

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1 hour ago, Shadow said:

I'd be interested to see the levels of defaulting on these loans before I strapped myself into the Outrage Bus, althoug hI have made a reservation. John, can you keep a seat free for me?

 

from - http://about.wonga.com/news-and-press-office/wonga-group-full-year-results-12-months-december-31-2015/

  • Principal default rate** down from 7.4% to 4.4% at Group level and from 6.6% to 2.8% in the UK, reflecting strengthened lending criteria and a focus on positive customer outcomes.

 

** Principal default rate is defined as the 180 days arrears rate of principal not repaid.

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See also this article regarding how the companies have diversified -wonga far from the worst

https://www.theguardian.com/money/2018/apr/14/wonga-mark-2-new-breed-of-payday-lenders-oakam

Oakam, which advertises heavily on daytime TV, boasts it will lend to those on benefits or with CCJs. New customers can borrow between £200 and £1,750 and repay it over three to 12 months. Returning customers can “borrow up to £5,000 over time”. Oakam’s typical APR is 1,421%.

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8 hours ago, Saintslass said:

However, it's not just the desperate who use pay day loan companies.  All it takes is for a surprise expenditure to come along to someone on an average salary and that can create difficulties, for example the washing machine breaking.  A pay day loan is very helpful at that point as banks will not necessarily lend for that sort of outgoing.  On one report a few days ago anecdotal evidence was referred to of an increase in thefts following the introduction of legislation tightening up the practices of pay day loan companies.  There is a need for short term credit.  

There is a need for short-term credit, but generally the APR is so steep that if you can't pay for it one month, you are unlikely to have sufficiently changed your financial situation to pay for it plus interest the following month. Credit unions and crisis loans need to be supported more I think.

7 hours ago, ckn said:

The other thing that people don't really get that having a pay-day loan taints your credit record for 6 years meaning they're about all that'll loan to you from that point on. The "big" lenders who do the low rates will see Wonga on your record and automatically score you down heavily.

That generally isn't true. While pay day loans stay on your record, they generally don't have any impact on your score after 1-3 months, providing you haven't missed any payments. The only negative stuff that stays on your record for 6 years is defaults and CCJs. Lenders also can't see which individual lenders have lent you money (only type of lending), but even so, pay day loan data wouldn't have a significant impact on your score. 

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3 minutes ago, Saint 1 said:

There is a need for short-term credit, but generally the APR is so steep that if you can't pay for it one month, you are unlikely to have sufficiently changed your financial situation to pay for it plus interest the following month. Credit unions and crisis loans need to be supported more I think.

That generally isn't true. While pay day loans stay on your record, they generally don't have any impact on your score after 1-3 months, providing you haven't missed any payments. The only negative stuff that stays on your record for 6 years is defaults and CCJs. Lenders also can't see which individual lenders have lent you money (only type of lending), but even so, pay day loan data wouldn't have a significant impact on your score. 

On the credit record thing, that came from an article I read a while ago, can’t find it now though. This is what Experian have to say on the subject

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8 hours ago, ckn said:

The other thing that people don't really get that having a pay-day loan taints your credit record for 6 years meaning they're about all that'll loan to you from that point on. The "big" lenders who do the low rates will see Wonga on your record and automatically score you down heavily.

That isn't really true.

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