MSE News: Wonga responds to US debt comparison jibes

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  • kipendo
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    Am having a total panic now - took out a loan with Wonga several months ago - and had completely forgotten about it having not heard anything from them...have now checked and I owe £1300!

    I know I was stupid to take it out in the first place and even more stupid to then forget about it, but is there anything I can do?? I don't have that kind of money to instantly pay it off and I doubt I'd be able to get a normal loan with better APR to pay it off!
  • kdakin
    kdakin Posts: 30 Forumite
    edited 2 June 2012 at 9:38AM
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    MARTIN,
    I started to respond to your "PAYDAY loan specific" thread with some facts about Wonga until I realized I had to register/login to Facebook to add a comment. I am sorry but I will NEVER use Facebook again and especially not by being "forced to", in order to just submit a comment.

    Facebook retain your details even after their supposed deletion of membership and today I hear they track your other search queries even if you are logged off their site! The cheek of it!.
    I AM TOTALLY OPPOSED TO SALE TO MONEYSUPERMARKET.COM
  • pete_v
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    If I had a pound for everytime I publicly blamed myself for part of the fault, I wouldnt be in debt right now!

    What I can't understand is why you think it's only "partly" your fault.

    Unless one of these loan companies did something fraudulent or in breach of your contract with them (which you haven't said is the case) then they've done exactly what you agreed for them to do. What you *asked* them to do, in fact, as I assume you approached them rather than them shoving cash and a credit agreement in your face as you walked along the street.

    If you used them irresponsibly, then the fault is all yours.

    Now, I can see that it's easy to get stuck in a spiral with these things, sometimes starting with a very small mistake that grows into hugely disproportionate consequences. I can certainly have sympathy for those in this situation, including you. The point I'm trying to get across is that sympathy and fault are not the same thing. If one of my friends walked too close to the edge of a cliff, and fell off and broke his leg, I'd be very sympathetic towards him but I wouldn't say it was partly the cliff's fault.

    Pete
  • RobertoMoir
    RobertoMoir Posts: 3,458 Forumite
    First Anniversary Combo Breaker
    edited 28 September 2011 at 1:35PM
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    pete_v wrote: »
    What I can't understand is why you think it's only "partly" your fault.

    Unless one of these loan companies did something fraudulent or in breach of your contract with them (which you haven't said is the case) then they've done exactly what you agreed for them to do. What you *asked* them to do, in fact, as I assume you approached them rather than them shoving cash and a credit agreement in your face as you walked along the street.

    If you used them irresponsibly, then the fault is all yours.

    Now, I can see that it's easy to get stuck in a spiral with these things, sometimes starting with a very small mistake that grows into hugely disproportionate consequences. I can certainly have sympathy for those in this situation, including you. The point I'm trying to get across is that sympathy and fault are not the same thing. If one of my friends walked too close to the edge of a cliff, and fell off and broke his leg, I'd be very sympathetic towards him but I wouldn't say it was partly the cliff's fault.

    Pete

    I'm usually very happy to see people who shout about "irresponsible lending" that actually its irresponsible borrowing on their part, but I don't think its as clear cut as that in this case. There is blame to be had on both parts and Say No To... seems to be accepting their share of the blame.

    Given the large number of PDLs that "say no to..." has had, then actually yes I would say that for once once the loan companies are guilty of irresponsible lending in their case. 64 loans over 18 months, more than three loans a month in other words, is quite a lot of unchecked borrowing wouldn't you say?
    If you don't stand for something, you'll fall for anything
  • pmcg01
    pmcg01 Posts: 64 Forumite
    First Anniversary Combo Breaker
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    There is nothing wrong with Wonga.

    APRs as discussed are misleading for short term loans.

    I am absolutely certain that if you went into to overdraft with your bank by the same amount, for the same period, you would be charged more, especially if unauthorised.

    For example, if I went overdrawn by £100.00 for 30 days with my bank (and this is an agreed overdraft), it would cost me £1.50 a day, or £45.00 in fees. With Wonga, it would be £36.72 in interest and fees.

    Some banks are more, and it would cost a fortune with a bank if it was unauthorised, or if the alternative was to see direct debits or cheques bounce.

    Those who complain, clearly do not understand how loans and overdrafts work and as for those who complain about borrowing regularly, stop blaming responsible companies and look at yourself.

    If they were not there, you would not suddenly be responsible or financially sound, probably worse so, as the only alternative would be to go to constant overdraft, with all the fees, and no clue what the equivalent APR is.
  • JimmyTheWig
    JimmyTheWig Posts: 12,199 Forumite
    Name Dropper First Post Combo Breaker First Anniversary
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    pmcg01 wrote: »
    the only alternative would be to go to constant overdraft, with all the fees, and no clue what the equivalent APR is.
    Good point.

    Maybe banks should have to tell you the APR they are charging you each time they tell you how much you are going to be charged for your overdraft usage.

    For example, go overdrawn by £1 for 1 day with Halifax and get charged £1. Am I right in thinking the APR for this is over a googol?
    I make it 7,515,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000%
    And people complain about Wonga?
  • kipendo
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    Can someone tell me (see above post!) if I'm legally entitled to freezing the amount owed and setting up a monthly repayment plan to pay off my debt to Wonga before it gets any bigger?
  • myth123
    myth123 Posts: 388 Forumite
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    kipendo wrote: »
    Can someone tell me (see above post!) if I'm legally entitled to freezing the amount owed and setting up a monthly repayment plan to pay off my debt to Wonga before it gets any bigger?

    i work for the CAB as a debt caseworker and recently (to my suprise) Wonga accepted £1 per month and froze the interest for my client.. all we did was explain her circumstances and send a financial statement! try it yourself if not contact your local CAB! :beer:
  • Hi Kipendo ....

    Contact me through the forms on my site, say no to payday loans etc - just google it. I have dealt with Wonga repayment plan personally so I could offer a bit of help.

    Pete V - will respond to you shortly.
  • Pete,

    Firstly I appreciate and respect your views, it is always good to hear differing opinions rather than people blindly agreeing with others comments, also thank you for your sympathy, however you are incorrect in what you say - the responsibility rests on both parties.

    Also disagree with your cliff analogy, we are talking about a 'professional and responsible' financial industry capable of making decisions, not a mass of land that has no thought and no voice, it is a silly comparison.

    Onto facts and I will lay a few out right here - my borrowing history;

    Payday UK - 4 loans, 13 interest only 'rollovers' plus 4 final payments
    Payday Express - 7 loans, plus 7 interest only 'rollovers' plus 7 final payments
    Lending Stream - 3 loans, 6 payments
    Wonga - 19 loans including 3 topup loans, 1 rollover, 16 final payments
    Quick Quid - 2 loans, 3 final payments
    Pounds Till Payday - 9 loans, 9 final payments
    Txtloans - 13 loans, 13 final payments
    Cash Genie - 3 loans, 1 interest only rollover, 3 final payments
    24/7 MoneyBox - 1 loan, 1 final payment
    SafeLoans - 1 loan, 1 final payment
    Wageday Advane - 1 loan, 1 final payment
    Uncle Buck - 1 loan, 1 final payment

    Note that the last 4 single loans were the last I took - after everything before it. Also note that Cash Genie was the only one to decline a loan application during that time.

    Now as I have already explained I accept my share of responsibility and fault but lets discuss the industries, and I refer to the OFT Responsible Lending Guidelines produced in February this year;

    2.2a - Creditors should not use misleading or oppresive behaviour when advertising, selling or seeking to enforce a credit agreement - Search the internet, many payday loan firms and brokers advertise as guaranteed acceptance, no credit checks, no paperwork etc. It is misleading, designed to entice the desperate.

    2.2b - Creditors should make a reasonable assessment of whether a borrower can afford to meet repayments in a sustainable manner - These are short term loans, when a person is borrowing from the same company every single month, bearing in mind that these lenders ask no questions about other financial commitments in their application forms, then clearly the industry is not making reasonable assessments.

    2.2d - Creditors should monitor the borrower's repayment record during the course of the agreement, offering assistance where borrowers appear to be experiencing difficulty - this applies to those stuck in a borrowing cycle, or those who borrow from such like Payday UK, rolling over for 6 months solid without any problems ....

    2.2e - Treat borrowers fairly and with forbearance if they experience difficulties - Payday UK after my first loan told me of the disasterous consequences of missing my early payments which set the ball rolling, they should have helped me. I also went through absolute hell setting up repayment plans, its all in my book, too much to even consider writing here!

    I could go on and on, the document from the OFT is free to download off their website, going into credit agreements, assessments of affordability etc. I will however go back to some issues I know of;

    After I finally defaulted with Pounds Till Payday they told me they did not have the facility to set up a repayment plan, but twice recommended I paid the money back in full and borrowed again assuring me my credit file would not be damaged and guaranteed I would be able to immediately borrow again. I have this in writing.

    Payday Express stated in their website terms and conditions that they would not always carry out a credit check.

    Wageday Advance stated they could not offer repayment plans to first time customer's, only those who have built up a level of trust through 'a number of loans'.

    Wonga for example offer trust ratings, where people can borrow more every time they sucessfully repay a loan in full on time, but clearly do not cross reference this against any credit checks? For example one person I spoke to borrowed 400 from Wonga, then went on to borrow for 11 months straight, every month increasing the amount with the last loan at 960 pound before setting up a repayment plan after speaking to me.

    The list is endless it goes on and on. The payday loan industry has a responsibility to act in the appropriate manner, basing decisions on guidelines set out by the OFT. Some of the guidelines are not strong enough in my views, and in some cases many of the lenders do not conform to what is being requested. BUT the industry cannot possibly ignore even an ounce of responsibility and blame for my circumstances, I applied for all of those loans - they approved every single one of them.

    And to finish on an analogy ... I saw a drunk propping up the bar in my local pub, when he asked for a pint, the bar tender told him no, you have had too much to drink and I cannot let you continue - go home, and sleep it off.
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