Tv Adverts for Money Lenders

asbokid

PrincessPeach1988 wrote: »

In real terms borrowing £100 for a week on Wonga will cost you £12.78 extra, which isn't really that much in the scheme of things.

That's the theory.

In practice, those who borrow from Wonga.Com are already ill-informed. They will invariably default on their "promise" to repay the "payday" loan by the nth day.

That's when that paltry £12.78 balloons into hundreds and thousands of pounds.

So the breathtaking APR of 4000% is very much the critical factor here.

Error Damelin, the grinning front-man for Wonga.com, claims that this cannot happen. Damelin baldly states that interest on Wonga loans is frozen at day 60.

Yet even the featherweight Simon Read of the Independent challenges that claim. Citing a reader who defaulted on her Wonga loan, Reed recounts how her debt spiralled completely out of control. [1]

Can't happen? Interest frozen at day 60? Must be another "admin error", eh?!

Like all parasites, Wonga has no wish to actually kill its host. In fact it must nurture its prey to prolong its survival, so as to maximise the blood draw.

Think of the caged bear being milked for its bile. That is the cruel mindset of the scoundrels behind Wonga.

And defaulting is exactly what the punter is expected to do. It is a crucial part of the Wonga business plan.

Examine the low-brow parlance from Wonga. See how the lender falsely reassures the punter that it's a-okay to "roll-over" the loan to another month. "Go on! You know you want to! It's fine by us!"

Wonga dresses up its scummy outfit as offering short-term loans only. Plenty of suckers fall for that sleight of hand.

Those who turn to Wonga have already mismanaged their finances, big-time. And sadly they will make the same blunders all over again.

They borrow small sums of cash at an eye-watering 4000% for "up to" 31 days. Then they default on repayment, allowing Wonga to drag their loans into the medium- and long-term.

Which is exactly what Damelin, Liautaud and the gangsters of High Finance who cooked up the scheme, had priced in from the very outset.

Of course, Wonga, in common with other parasitic organisms, will eventually disable its host. Loaning cash at a crippling 4000% APR can have few other outcomes for the victim.



What is deeply disappointing is to find our money-saving gurus lending their seals of approval to Wonga.com.

Kicking off the brown-nosing was Alan O'Sullivan, a scribbler from Viscount Rothermere's camp. (No great surprise there.)

In his article from May 2010, O'Sullivan headlined it 'Wonga: the best of a bad bunch?" [2]

Then October last, our own money-saving expert, Martin S. Lewis, weighed in himself to endorse the bete noire of moneylending.

Lewis told the Guardian that "Wonga is one of the best providers in an industry that breaks my heart." [3]

Those extraordinary displays of public fawning are far removed from the disastrous outcomes for many who actually borrow from Wonga.com.


[1] http://www.independent.co.uk/money/spend-save/simon-read-its-not-just-the-weak-that-can-end-up-in-a-debt-spiral-6275149.html

[2] http://www.thisismoney.co.uk/money/cardsloans/article-1677524/Payday-loans-Wonga-best-of-a-bad-bunch.html

[3] http://www.guardian.co.uk/money/2011/oct/16/wonga-algorithm-lending-debt-data

Derivative

piglet25 wrote: »

If these companies had anything about them they wouldn't lend to people who obviously can't pay it back, which is why the banks won't lend to them, they are not vermin who live above their means, they are people who have no money put by for rainy days. These companies are the vermin praying on their misfortune.

Whether they are 'vermin' or not is a matter of personal judgement, but if you are required to take out a pay day loan, you are living above your means as a matter of fact, surely.

Annual income twenty pounds, annual expenditure twenty pound ought and six, result misery.

PrincessPeach1988

piglet25 wrote: »

If these companies had anything about them they wouldn't lend to people who obviously can't pay it back, which is why the banks won't lend to them, they are not vermin who live above their means, they are people who have no money put by for rainy days. These companies are the vermin praying on their misfortune.

I don't imagine these companies actually want to lend to people who can't pay it back. I imagine the trouble of having to recover the debt would make the original loan pointless and unprofitable, i'd imagine their ideal is people who don't have the financial discipline to live within their means on a monthly basis and therefore borrow and pay back on a regular basis.

Furthermore these companies aren't forcing people to take their loans, they are offering a service that some may decide to take up.

Obviously I understand that people suffer misfortune, but why should it be the responsability of others to cover for this? surely it comes to a point where an individual has to make a decision on whether they can afford to pay back the loan on the agreed day, and if they can't then they find another way of coping with dealing with the misfortune.

asbokid wrote: »

That's the theory.

In practice, those who borrow from Wonga.Com are already ill-informed. They will invariably default on their "promise" to repay the "payday" loan by the nth day.

That's when that paltry £12.78 in interest and charges balloons into the hundreds and thousands of pounds.

So the breathtaking APR of 4000% is very much the critical factor here.

Again though, surely thats the fault of the customer rather than the company specifically looking to exploit them.

I don't know if we're arguing the same thing here, but whether the companies such as Wonga are morally right or wrong depends on your personal views on morality and business ethics but one party that seems to escape all criticism is the one who, in my opinion, whose fault the situation is yet they very few people seem to see them as accountable and that is the people who use these sites and aren't able to pay them back.

Furthermore my personal opinion is that the public perception of financial instituations seems to have become warped amongst the British public. At the end of the day these are businesses, whose primary purpose is to make money, yet people seem to think that these businesses exist solely for the purpose of their convenience and that they shouldn't be penalised if they contravene the guidelines in which they are bound.

PrincessPeach1988

Double post.

celtus

I still think an APR 4,214% are obscene, i remember not that long ago that there was an investigation into store cards APR charges and being decribed (in the link below) as "fleecing the public, highway robbery and usury". and these only charge upto 32.5%, that almost makes it the bargain of a lifetime...yeah right (and that's my point, it will make people (over time) think that bank loans of the future that could charge say 30%+ seem cheap in comparison and this will only lead to even more misery. As if things wernt bad enough already, what with record numbers of people losing their homes ect.... The kids of tomorrow will sadly be the ones that think loans with extreme APR's are normal, when this is simply not the case.


Read more: http://www.dailymail.co.uk/news/article-195614/Government-crackdown-store-card-rates.html#ixzz1hycBvArX

Derivative

celtus wrote: »

The kids of tomorrow will sadly be the ones that think loans with extreme APR's are normal

Good.

Maybe then they won't be tempted to take them out.

PrincessPeach1988

Thats the problem with APRs though, its unrepresentative of how these loans are supposed to work.

I mean (and forgive me if i'm wrong but I used an online APR calculator for this) if you were in a hole and asked to borrow £65 off a mate for a day, and then the next day gave him his money and bought him a pack of beers (£6.50) to say thank you. Then that would be the equivilent of 21,883% APR. Even though you are only giving him 10% more of the original cash he leant you.

Obviously the scenario is a bit farfetched and completely hypothetical but it just shows that just because the APR is high, that the customer isn't being neccersarily fleeced. in fact


Again, apologies if this is wrong, or I have got the wrong end of the stick, As said above I havn't worked this out myself, i've used and American APR calculator.

asbokid

EdgEy wrote: »

Whether they are 'vermin' or not is a matter of personal judgement, but if you are required to take out a pay day loan, you are living above your means as a matter of fact, surely.

Annual income twenty pounds, annual expenditure twenty pound ought and six, result misery.

Nice quote!

We shouldn't expect the paid grunts in the corporate press to paint a simple picture of Wonga's trade. They are on the payroll of the same City gangsters who engineered the "payday loan" scam.

The irony is that many, if not most suckers who take out "payday" loans are living on social security benefits. For those people, "pay-day" actually means "Giro-day".

It would be instructive to see a list of (real) reasons for taking out a "payday" loan. Here's betting that very few loans are for genuine emergency needs.

Many loans made by Wonga are doubtless to drug addicts and alcoholics who can think only of their next fix.

It's apt to see a quote from Charles Dickens. Dickens was no stranger to the evils of debt. His own father John Dickens was locked up in Marshalsea, a Debtor's Prison.

The incarceration of his father must have deeply disturbed young Charles. He was barely 12 years old when his father was wrenched from their family home, and locked away at the whim of his creditors.

Wilkins Micawber, the character from Dickens' novel David Copperfield, was modelled closely on Dickens' father and the plight he suffered at the ruthless hands of the human garbage of banking.

The tyranny of the moneylender is a theme common to several Dickens novels, including Nicholas Nickelby, Little Dorrit and A Christmas Carol.

Wikipedia has an entry on Ebenezer Scrooge describing the wretched miser as "a banker or professional money lender. Whatever his main business is, he has usurious relationships with those of little means."

Errol Damelin, Wonga CEO, deserves an Awakening of his own, like Scrooge had before him.

I see a haunting apparition in the Wonga boardroom. As the chandeliers flicker, comes a ghostly tapping from behind the oak paneled walls!

asbokid

Borrow £65 for 60 days from Wonga.com at 4,214% APR







Wonga would expect you to pay them at least

£120.68
(excluding charges)

It is no "mate" of mine who tries to lend money at that insane rate of interest!

Derivative

asbokid wrote: »

It would be instructive to see a list of (real) reasons for taking out a "payday" loan. Here's betting that very few loans are for genuine emergency needs.

This isn't really exclusive to payday loans though.

Credit card debt at its' "modest" 40% APR really has no valid usage. Neither do car loans, or any type of loan at a rate of interest above that in a savings account.

I did enjoy the rest of your post. Informative.