Wonga on brink of collapse

PixelPound

Most of us would never use brighthouse because of how much it costs for the goods, but those who do have a fixed weekly income, whether benefits or wages, and know exactly what they have to pay for. So its not a case of "its only £8 per week" and they definitely don't think a pitance, but more that they know what they have to pay, for electric gas etcm and how much they then have for the rest of the week and probably know they can spend less elsewhere to afford it.

This is different to the wonga loan shark style tactics where a loan is given as a short fix which they pay back, but rather than it been for a one off expense it was cover shortfall on normal living expenses meaning after paying it back they will be shorter the next month or its rolled into a bigger future loan.

dekaspace

Ian_875 wrote: »

I think it's twofold

1. People don't actually calculate how much they'll end up paying. They just think "£8 a week? That's pittance". I think some people don't even equate that to being £32 a month. This is intentional on the part of Bright House, they get the 'sticker price' as low as possible. I'm sure if they could get away with saying it was only £1.14 a day they would.

2. Once someone has committed to looking at something for £8 a week, they're alot more willing to go for a higher spec model than they actually need. Let's say the model up is £10 a week. That's only an extra £2, it's easy to swallow without thinking how that £2 mounts up over the course of the agreement week after week.

Without generalising, the type of person that would go to bright house etc rather than look on Gumtree or second hand is the type that wants the newest and best, and as long as they can kid themselves that it's only a few quid a week will willfully ignore the APR and overall cost.

You and I both know that spending £100 for example on a second item vs £1000 on a new item is the better buy. Yes, it might break and need replacing sooner, but as long as it lasts a few months it's worth it as you'd need 10 of the £100 devices to break before it would make sense to get the £1000 model.

I'm simplifying somewhat, but hopefully I've managed to explain

For the record, I'd never use bright house (or get anything on credit really, I'm quite frugal), but the people of MSE aren't really the target audience.

A memory for me, is back when I first left home I learned my lesson early on, when I got £5 a week housing benefit and my income covered my rent anyway (but only £5 a week for food, expenses etc) I decided I can live off noodles, pasta, bread etc and spent £100 on a used tv and games console, a few months later I was short of cash for rent because of unexpected outgoings mixed with naivity (My income was actually lower than I thought meaning I was like £10 a week in the red rather than £5 in the black. so when it came to Easter time I had no money to pay LL rent (luckily college sent me a letter stating they had leftover funds so was increasing by bursary which covered the rent amount) Even then though I was back to the original £5 a week to live off.


And my first real debt was a credit card, after I finished college I couldn't afford the minimum payments, which for a £200 limit were £10 a month about 3/4 of that was interest so the balance wasn't lowering and in fact I must of paid off the £200 by time I defaulted at which point they added like £500 in fees, if I couldn't afford £200 I couldn't afford £700.


Sorry maybe side story point being with the mark ups even being nowhere near Wongas at its peak I struggled due to naivity

[Deleted User]

Red-Squirrel wrote: »

Where can you get free second hand stuff?

Freecycle or Gumtree.
Already mentioned upthread.

Red-Squirrel_2

Moneyineptitude wrote: »

Freecycle or Gumtree.
Already mentioned upthread.

Even if you are lucky enough to get a completely free fully working washing machine/fridge etc. on one of those sites (they are rare finds and always snapped up quickly) the giver doesn't usually offer a delivery service, so you have to either have a friend with a big enough car or van who is willing to help or hire a van if you drive, or hire a man and a van if you don't. That's where it can fall down.


I don't really understand the desire to always find a way to blame struggling people for their own problems, why is it important that it always be their own fault? Does it make it easier to imagine that it could never happen to you?

Ian_875

Red-Squirrel wrote: »

In my experience the kind of person who goes to Brighthouse etc. is the kind of person for whom £100 is a lot of money and more than can be found at short notice. They are people for whom £100 for a second hand washing machine may as well be £10,000.

Because of this, when they need to replace white goods, those cheap second hand options aren't actually available to them because you need the cash upfront. Going to somewhere like Brighthouse is actually one of the only options that makes it possible to get a new fridge/washing machine sofa when the old one is broken. They aren't people who have access to the cheapest credit or good rates on loans, because they are on benefits or on low and unstable wages and also because they are quite likely to have several payday loans and high interest credit agreements from Brighthouse etc already in the credit file. They think they can manage £8 a week, but then when the next £8 a week comes along, and the next, it gets too much, sooner or later there's not enough left to put any money on the electricity meter or the kids need new school shoes again or someone who had stopped smoking starts again due to the stress or Christmas is creeping closer and nobody wants to see their children do without any presents and that's when they turn to the likes of Wonga.

The biggest barrier to effective moneysaving is not having enough money in the first place. There's a reason poverty is described as a trap.

Hit the nail on the head there.

I think theres situations whereby both our views are accurate, but I certainly think theres alot of overlap.

I think your example is probably true in alot of cases of white goods, whereas mine is probably true in the case of 'luxury' goods (newer sofas, bigger TV etc)

Ian_875

Red-Squirrel wrote: »

I don't think anybody takes pride in their washing machine, really.

Purely anecdotally, but an acquaintance of mine, having had his first kid and living with his new partner, happily showed me his top of the range washing machine that he'd got from Bright House. I forget the model, but it was a full on, bells and whistles model.

He was very, very proud of it and showed me all the different features.

That was a clear case where heart ruled the head, and although he couldn't afford to buy one outright, he could have easily got a lower model for a cheaper monthy/weekly payment.

I appreciate he needed a washing machine in a pinch, but he didn't need that one!

Red-Squirrel_2

Ian_875 wrote: »

Purely anecdotally, but an acquaintance of mine, having had his first kid and living with his new partner, happily showed me his top of the range washing machine that he'd got from Bright House. I forget the model, but it was a full on, bells and whistles model.

He was very, very proud of it and showed me all the different features.

That was a clear case where heart ruled the head, and although he couldn't afford to buy one outright, he could have easily got a lower model for a cheaper monthy/weekly payment.

I appreciate he needed a washing machine in a pinch, but he didn't need that one!

True, I wonder if new dad provider instinct played a part there!

I also wonder if the staff in the brighthouse shops are pushing for more expensive stuff.

Willing2Learn

Source: Guardian Newspaper

Wonga has stopped taking new loan applications as the struggling payday lender teeters on the brink of collapse.

The news comes days after it emerged that the company had lined up Grant Thornton to act as administrator in case the lender’s board decides it cannot be rescued.

A statement on its website read: “While it continues to assess its options Wonga has decided to stop taking loan applications."

“If you are an existing customer you can continue to use our services to manage your loan.”

Dandytf

Willing2Learn wrote: »

Source: Guardian Newspaper

Interesting you didn't mention


https://www.theguardian.com/commentisfree/2018/aug/30/cheer-wonga-fails-grateful-payday-lender-valuable-service

Willing2Learn

Dandytf wrote: »

Interesting you didn't mention


https://www.theguardian.com/commentisfree/2018/aug/30/cheer-wonga-fails-grateful-payday-lender-valuable-service

I don't bother with the editorials as it is all too subjective...