No-one sensible will shed a tear for Wonga. But its success was a symptom of something bigger: the failure to provide vulnerable people with a desperately-needed safety net
by Dawn Foster / August 30, 2018 / Leave a comment
The home page of Wonga’s company website with a message stating that they have stopped taking new loan applications. Photo: PA
When Wonga was established, the advertising for the company pitched the payday loan company as something new and original in finance. Cutesy graphics framed sliding buttons laying out the interest and repayment period of each loan, and the ads for the business followed you around the internet and nestled in the ad breaks on whichever channel you watched.
In reality, they were identical to all the other high-interest lenders across the market: the obscene interest and deliberate targeting of people in poverty and crisis meant that while some people paid the loans back without issue, many were forced to ‘roll over’ payments, or take out other loans to pay off the original sum, spiralling into debt rapidly.
Now, Wonga is rumoured to be facing collapse: the company have stopped offering new loans to customers, and a surge in compensation claims has led the firm to issue a statement that refused to rule out going into administration.
There will be few tears shed by anyone sensible. The company were forced to write off £220m in loans in October 2014 due to failing to properly apply affordability checks as a lender, and paid £2.6m in compensation after admitting to sending letters from fake legal firms to customers to attempt to scare them into paying their arrears.
You have now reached your limit of 3 free articles in the last 30 days.
But don't worry! You can get another 7 articles absolutely free, simply by entering your email address in the box below.
When you register we'll also send you a free e-book—Writing with punch—which includes some of the finest writing from our archive of 22 years. And we'll also send you a weekly newsletter with the best new ideas in politics and philosophy of culture, which you can of course unsubscribe from at any time
Prospect may process your personal information for our legitimate business purposes, to provide you with our newsletter, subscription offers and other relevant information.
Click to learn more about these interests and how we use your data. You will be able to object to this processing on the next page and in all our communications.
