MSE News: Wonga busted by the FCA: 330,000 to have their loan wiped

fermi

http://www.independent.co.uk/money/loans-credit/payday-lenders-forced-to-shut-up-shop-9774990.html

Monkeyballs

Thanks Fermi, that makes for interesting reading.

A lot of people seem to be making assumptions that everyone is suddenly going to start going to loan sharks... I for one have never met a loan shark nor have I any clue as to how I would go about finding one if I wanted to!

A lot of people saw Payday lenders as a convenient way to get what they want now, and they were not necessarily using them to manage day to day. I for one used them when I had a gambling problem, if they didn't exist then sure I may still have had a gambling problem but I wouldn't have been in the same amount of debt as it wouldn't be available to me in the same way it has been...

I do not foresee hundreds or even tens of thousands of people starting to turn to loan sharks because in mainstream media loan sharks have always been made to look bad (which they obviously are) but I think that getting rid of quick and easy forms of credit will help to improve the nations view on money and finances.

Again, while there is nothing better I do see a corner in the market for short term lending but fingers crossed it won't be given to some lying little scrote who says "they earn £1,900 per month" and wants to borrow £500 for a night out...

I have no sympathy for anyone who lied to obtain credit, I have no sympathy for myself or others like me who used to gamble whatever they could get theirs grubby little hands on but I do have sympathy for anyone who genuinely was in a predicament and thought this was a viable option.

Next I would like the FCA to look into companies like Provident and Shopacheck, etc. It's one thing for doorstep lenders to do weekly collections and they are more "friendly" than loan sharks but they do seem to target areas with low income and when you are just about paid they have a habit of sending a "friendly" letter (especially around Christmas) offering top up loans - again, people must take responsibility for their own actions but when there is an easily coerced section of society they must be protected and not mocked and scorned.

MB

johndawgylt

So, has anyone been contacted yet? What did the letter say?

Brains64

Monkeyballs wrote: »

Thanks Fermi, that makes for interesting reading.

A lot of people seem to be making assumptions that everyone is suddenly going to start going to loan sharks... I for one have never met a loan shark nor have I any clue as to how I would go about finding one if I wanted to!

A lot of people saw Payday lenders as a convenient way to get what they want now, and they were not necessarily using them to manage day to day. I for one used them when I had a gambling problem, if they didn't exist then sure I may still have had a gambling problem but I wouldn't have been in the same amount of debt as it wouldn't be available to me in the same way it has been...

I do not foresee hundreds or even tens of thousands of people starting to turn to loan sharks because in mainstream media loan sharks have always been made to look bad (which they obviously are) but I think that getting rid of quick and easy forms of credit will help to improve the nations view on money and finances.

Again, while there is nothing better I do see a corner in the market for short term lending but fingers crossed it won't be given to some lying little scrote who says "they earn £1,900 per month" and wants to borrow £500 for a night out...

I have no sympathy for anyone who lied to obtain credit, I have no sympathy for myself or others like me who used to gamble whatever they could get theirs grubby little hands on but I do have sympathy for anyone who genuinely was in a predicament and thought this was a viable option.

Next I would like the FCA to look into companies like Provident and Shopacheck, etc. It's one thing for doorstep lenders to do weekly collections and they are more "friendly" than loan sharks but they do seem to target areas with low income and when you are just about paid they have a habit of sending a "friendly" letter (especially around Christmas) offering top up loans - again, people must take responsibility for their own actions but when there is an easily coerced section of society they must be protected and not mocked and scorned.

MB

Some very good points there you've made, in fairness to Wonga I think that what has gone for them should go for the rest too because you can be sure as the grass is green that they won't have been the only lender who gave people loans without doing proper checks, now that they've come down on Wonga, the regulators have a moral responsibility to force those other lenders to do the same as they are getting Wonga to do otherwise it just looks like Wonga are being used as some kind of a token sacrifice for the whole industry and how would they be able to compete with those others if those others are allowed to get away with that practice and not Wonga?.

Not to mention the obvious fact that many lenders are in the business of lending to people who might not get a loan elsewhere because of bad credit and I'm one of them myself, I got refused by my bank and that's why I turned to payday lenders like Wonga and many others in the first place but the point I'm getting at is their very reason for existence is to lend to people who have questionable credit ratings and therefor will be a risk in terms of whether they can repay a loan or not.

So at the end of the day I think the regulators have seriously got to consider whether any of the new standards that they impose on Wonga and others will be implementable for them as a business, personally speaking, I can't see Wonga surviving as a payday lender, I doubt if there will be any left at all under these new rules, it's great what the regulators are doing, don't get me wrong, people need to be protected, I'm all for that but as someone who knows the reality of the situation that puts people in a position where they fall into this industry it's not going to be any mean feat to attempt to clean it up, to be honest, I don't see how because it's a case of either having the cake or eating it but you can't have both, by it's very nature it can't be a 'decent' industry, by it's virtue it's a dirty business that can only be like that or not at all.

Monkeyballs

Agreed, I am 100% confident that the FCA will (or at least should and eventually will) do the same with other PDL's - legally I'm not sure where they would stand if they didn't?

I don't however think that Wonga will go under, they're the first so they have free reign over what they do next and they can get ahead of the competition and be a market leader... Good things can come out of bad beginnings (I'm thinking Volkswagen Beetle here but there must be a better analogy).

MB

whatamuppet

tomtontom wrote: »

By all means sanction the lender but this decision is very poor. What happened to people taking responsibility for their own decisions?

I put my hands up when my situ changed and have been paying them back on a DMP. I have already paid back twice the original borrow and I will continue to pay until it is finished. If the balance is written because they didnt follow the rules I will accept it (gladly). People like you should be aware of the fact before making comments like this. I'm sure you know the old saying about not throwing stones in glasshouses.

johndawgylt

johndawgylt wrote: »

So, has anyone been contacted yet? What did the letter say?

I take it no one has been contacted?

Brains64

johndawgylt wrote: »

I take it no one has been contacted?

I know they are supposed to be contacting everyone effected by the 10th of this month but once again I think they've bitten off more than they can chew making that promise :rotfl:, what I would suggest to anyone though is that even if you don't hear from them and you have a debt, you can make payments towards it....IF....you can but if you can't then you probably won't have to worry too much, if Wonga tried to take you to court they're not going to be taken very seriously with their rep, payday lenders in general don't have a lot of respect in courts anyway and it costs them more to take a case there so they are unlikely to even bother, the best they can do is sell the debt to some private debt collector that has sweet FA authority really but they just like to try and frighten vulnerable people with their BS letters and things they say when they turn up at peoples doors into thinking they're real bailiffs with bailiff powers, not a bit of it, courts don't take them very seriously either, most of them are cowboys that have no respect for the law just like many PDL's, that's why courts don't see these kinds of cases as even worth their time, I say relax and give any money you have to more important debts than PDL ones

johndawgylt

Brains64 wrote: »

I know they are supposed to be contacting everyone effected by the 10th of this month but once again I think they've bitten off more than they can chew making that promise :rotfl:, what I would suggest to anyone though is that even if you don't hear from them and you have a debt, you can make payments towards it....IF....you can but if you can't then you probably won't have to worry too much, if Wonga tried to take you to court they're not going to be taken very seriously with their rep, payday lenders in general don't have a lot of respect in courts anyway and it costs them more to take a case there so they are unlikely to even bother, the best they can do is sell the debt to some private debt collector that has sweet FA authority really but they just like to try and frighten vulnerable people with their BS letters and things they say when they turn up at peoples doors into thinking they're real bailiffs with bailiff powers, not a bit of it, courts don't take them very seriously either, most of them are cowboys that have no respect for the law just like many PDL's, that's why courts don't see these kinds of cases as even worth their time, I say relax and give any money you have to more important debts than PDL ones

Thanks, but the original article states that everyone with a debt of more than 29 days in arrears will have it written off, not passed to debt collectors. Is this not the case now? It's worrying that no one else has heard anything and I've still not been contacted

ChrisS1

Wonga... I've not heard anything yet