Wonga on brink of collapse

anfieldred

Stupid question time - what happens if you've got a claim in progress and they go bust?

bxboards

tonycottee wrote: »

Do you actually know anybody that has used Wonga? Or have you been reading the Daily Mail again? Although if it makes you feel superior to people that have taken out payday loans, knock yourself out.

In my experience, sadly the person you responded to pretty much nailed it.

I suspect a large majority of people taking out the loans never had a 'pay day', as they never worked (unless payday was 'bank giro' day) - I know someone, heart of gold, would do anything for her kids - that means going to Brighthouse, giving them 900 quid iPhones for Christmas etc, she's not 'vulnerable' but doesn't have the means to pay for this sort of thing without loans topping up her 16 hours a week (no more than 16, or the benefits reduce)

The age of personal responsibility seems to be well and truly over, in life generally just not here. Personally speaking I do have an issue with companies offering loans at sky high interest rates, thats usary in old fashioned parlance. But ultimately if someone chooses to get into debt to pay for a champagne lifestyle on a beer money budget, who is to blame, the lender or the borrower?

bmws1985

The problem is Wonga behaved in a way where it was not a responsible lender. It targeted people with ever increasing limits with no checks and balances trapping people into a cycle of debt. Personal responsibility is important but desperate people do desperate things. Wongas business model meant it tried to avoid people paying off the initial capital and just pro longing interest payments. It actively targeted people with texts and emails to take higher and higher loans out more and more frequently. Borrowing behaviour like this would be a red flag to a CC company or bank account as it would signal distress but to Wonga it was a chance to simply make more money. They now need to pay for this irresponsible lending and hopefully continue to trade in a more equitable fashion.

Dandytf

Through some difficult times.

[Deleted User]

It's their over 500 work force I feel sorriest for. Can't work out whether it's conveniently happened a year prior to the hopeful tap off date for reclaims, although I get very generous payouts have to stop somewhere.

Never allowed a loan with Wonga (or Mr Lender) when I would have had other payday borrowings as they always differentiated themselves. Their sophisticated technology worked in that sense - They did not always lend to everyone and anyone.

sourcrates

anfieldred wrote: »

Stupid question time - what happens if you've got a claim in progress and they go bust?

You get nothing, insolvency protects them form any claims.


If your case had already been decided in your favor, then you become a creditor of Wonga, if there was to be a share out of assets, you may get something, you may not.

tonycottee

bxboards wrote: »

In my experience, sadly the person you responded to pretty much nailed it.

I suspect a large majority of people taking out the loans never had a 'pay day', as they never worked (unless payday was 'bank giro' day) - I know someone, heart of gold, would do anything for her kids - that means going to Brighthouse, giving them 900 quid iPhones for Christmas etc, she's not 'vulnerable' but doesn't have the means to pay for this sort of thing without loans topping up her 16 hours a week (no more than 16, or the benefits reduce)

The age of personal responsibility seems to be well and truly over, in life generally just not here. Personally speaking I do have an issue with companies offering loans at sky high interest rates, thats usary in old fashioned parlance. But ultimately if someone chooses to get into debt to pay for a champagne lifestyle on a beer money budget, who is to blame, the lender or the borrower?

And I suspect the moon is made of cheese. Seriously though, how do you come to your conclusion that the majority have never worked?

Of course there are people that borrow irresponsibly, whether it be from a payday lender or a loan shark. It’s wonderful that dealer wins knows so many people that tell him they use Wonga to purchase their new iPhone, but I think for the rest of us, we can only guess why they’re so popular.

bxboards

tonycottee wrote: »

And I suspect the moon is made of cheese. Seriously though, how do you come to your conclusion that the majority have never worked?

Because I believe that people who are genuinely working have no need of such loans in the majority of cases. Look right now, with historicaly low interest rates, and a minimum wage people are or should be much better of now than they have ever have been previously. What we define as 'poverty' here is laughable compared to genuine poverty in some 3rd world countries.

Again, I have an issue with high interest loans - for people in genuine need, I'd like to see interest rate reflect the base rate. I'm not defending Wonga, hence my use of the word 'usary' earlier.

But I'm sorry, but I believe that most of these loans were taken out for frivolous non essential purposes. The moon isn't made of cheese, I can assure you.

JIL

bxboards wrote: »

In my experience, sadly the person you responded to pretty much nailed it.

I suspect a large majority of people taking out the loans never had a 'pay day', as they never worked (unless payday was 'bank giro' day) - I know someone, heart of gold, would do anything for her kids - that means going to Brighthouse, giving them 900 quid iPhones for Christmas etc, she's not 'vulnerable' but doesn't have the means to pay for this sort of thing without loans topping up her 16 hours a week (no more than 16, or the benefits reduce)

The age of personal responsibility seems to be well and truly over, in life generally just not here. Personally speaking I do have an issue with companies offering loans at sky high interest rates, thats usary in old fashioned parlance. But ultimately if someone chooses to get into debt to pay for a champagne lifestyle on a beer money budget, who is to blame, the lender or the borrower?

You have quoted a person you know, how does that then lead you to concluding the age of personal responsibility is over?
The fifties and sixties meant a lot of necessary items in the home were bought on the never never.
I really don't think times have changed much for the less well off, unfortunately if their budgets will only pay for all the necessities and one month, their wages are short or their tax credits are late or there is an unexpected expense. Then there is nothing much they can do other than to borrow and the cycle begins.

I also feel the lenders have to take some responsibility, before a loan is agreed a credit check is done, this shows all borrowing and repayments. Is is right that someone applying for credit who cannot keep up current repayments, is given another when the lender can quite clearly see the financial stress this applicant is under or do they turn a blind eye as if they don't lend then another company will?

sourcrates

The problem with payday loans is that your never likely to have the extra money in your wages to repay it, if your £300 short this month, chances are you will be next month to, so that led to a cycle of borrow/repay, borrow/repay with no way out of it except to default.

Lots of fly by night companies sprang up offering loans at stupid rates of interest, but virtually anyone could get them, they would lend to anyone, when people couldn’t repay, then came the charges, and more interest, some were left owing thousands for a £300 quid loan, it was legalised loan sharking.

So the FCA cracked down on the industry, and the playing field levelled overnight, but this also opened the floodgates for the reclaiming of interest and charges, the level of complaints went off the scale, the loan product itself has now changed, instead of repayment on payday, it’s spread over a number of months, this makes it more affordable, whoever is left standing at the end of all this remains to be seen, however as the product has now mostly changed it should see less affordability complaints moving forward.