What Money Saving Expert have to say abiout Wonga…
From wonga.com, out to the big wide ranging world of the web. Firstly I started with Martin Lewis’s Money Saving Expert site (www.moneysavingexpert.com), which asks and then debates at length the question is Wonga a scam? Was this the article I was seeking to provide and independently detail how the Wonga scam was working in reality?
Sadly the answer was no! When I had fully read all the many posts and replies, the simple fact was that a customer had taken a pay day loan from Wonga and had failed to repay it on the agreed date and was endeavouring to imply that the company Wonga was a scam and a fraud. The majority of posts could be classed as testimonials, as they appear to be from Wonga customers giving independent reviews and solutions to how to resolve the unpaid debt from the originator, with a very supportive and protective tone towards Wonga.
Here are some examples of forum comments, posts and discussions that I found. Firstly posts and comments from www.MoneySavingExpert.com
| Snakeeyes21
16-01-2010, 7:49 PM |
|
| Serious MoneySaving Fan
Join Date: Jun 2007 Posts: 1,962 Thanked 1,945 Times in 939 Posts |
Quote: Thats a bit harsh. To say their a scam is just pigheaded and ignorant, do you not live in the real world where some people have no other option to use these companies? oh what it must be like to have a bank balance so big that you never have to worry about money. Believe it or not wonga are one of the best of a bad bunch, I know I’ve tried them all The op would have been given a chance to extend their loan by paying 20 or 40% of what they owed, then paying the balance plus interest ikn another 30 days, is it wonga’s fault they didn’t do this? At what point are they a scam? are people not made aware of charges? Or are you saying they become a scam once somebody doesn’t stick to the terms and conditions that they freely agreed to, and start getting additional charges. |
| freeoffers
17-01-2010, 2:10 AM |
|
| MoneySaving Stalwart
Join Date: Mar 2009 Posts: 204 Thanked 427 Times in 73 Posts |
Its scary how these ‘small’ loans add up to large amounts, but i used to work for a payday company as a manager and they are not scams. all the terms are in writing and we used to get customers coming in month after month to put off their loans and they ended up paying 3 or 4 times the original loan. Its not a scam, its just an exorbitant rate of interest. |
| bigdave1973
19-01-2010, 2:00 PM |
|
| MoneySaving Convert
Join Date: Dec 2009 Posts: 32 Thanked 5 Times in 5 Posts |
It seems crazy that you cancelled your card. Your concern here is that you want to pay back your loan & get your debt cleared, so you cancelled the only way that Wonga have of clearing your debt?!?! Cooltt, whilst this may not be the right product for you it doesn’t really mean that Wonga are a scam. They’ve done what they said they would and are probably charging the (high) fees they said they would. It’s not a scam, just an expensive loan |
| dazza12
25-05-2010, 10:54 AM |
|
| MoneySaving Newbie
Join Date: Mar 2006 Posts: 11 Thanked 5 Times in 2 Posts |
Their landline telephone number is 0871 288 5704. Yes it does cost 10p a minute, this is hardly a scam when 1000s of companies get away with using 0871 numbers. My bank and ISP insist on using 0871 and 0844 numbers and often have me holding for a long time. I’ve used the company in the past, and probably will again. I’m not up to my eyeballs in debt (in fact owe about a tenth of what I did 5 years ago), but occasionally I’ve needed to use them when a car repair has occurred the wrong side of payday. I’ve been fully aware of their terms, and also know how misleading APR can be when applied to short term loans. For instance, they don’t want to lend to you for a year, so why would a yearly calculation be appropriate? A separate calculation is needed for these types of loans (and also for overdrafts, bank charges etc) so a proper comparison can be made. My own situation is that I needed £250 for 14 days. Paid it off on payday and that was that. A few months later came home to find water all over the floor. I couldn’t afford to buy a washing machine so checked out Wonga again – this time borrowed £400 initially for 14 days again but paid this off within 5 days – if I remember correctly paid only £25 in charges. That’s less that what my bank would have charged me if I’d gone over my limit. It’s not intended to be used by those people robbing Peter to pay Paul, or who are at the point of desperation. As they credit check, it’s likely such people will be filtered out at application stage. They do allow you to settle at any point during the loan. Most of their competitors insist on the loan being fixed so at least you can reduce any interest charges if you’ve got funds before the collection date. It could be argued that I could use my credit card to do exactly the same thing. Although I’ve got a credit card, I use this for petrol and other work expenses, and get this repaid by my employer at the end of the month. My limit on this is low, this was requested by me – the last time I had a huge limit on my credit card was when I got into trouble (every purchase was justified as an ‘emergency’). I’m not going there again so requested a low limit. I know that this sounds like I’m a Wonga employee, but I’m not. I agree that some people should avoid such companies like the plague, their problems will not be solved by this company but will compound them. However, for people like me it’s worked. |
So an interesting overview from Martin Lewi’s team on the Wonga Scam debate… Next we look at Yahoo Answers
They aren’t a scam but the practice very irresponsible lending practices. Allowing people with very poor credit ratings to borrow again and again month on month at extortionate rates and then refusing to freeze interest when reasonable offers of repayment are made causing the debt to very quickly spiral out of control may not be illegal but is unethical and against the spirit of the Consumer Credit Licence. If you look on various financial forums there are multiple cases of Wonga lying to customers who have defaulted about what powers they have and what they can do to people who can’t pay and that is definitely illegal.
My son got a short-term loan from Wonga in Dec 10 of £500. He was laid-off from work within days of taking out the loan but of course was stuck with the loan and no way of repaying it within the 30day period. Wonga won’t even discuss a payment plan, or reducing the interest rate. After two months he has paid around £200 but now owes well over £900. While my son knew the the terms of the loan and was in a position to satisfy the loan at that stage, his circumstances have changed beyond his control. It’s hard to believe a company with any ethics would simply pile on interest upon interest at these rates. it’s also hard to believe that the government allows it. It is reminisent of the money lenders of previous generations, they just have bigger offices and are probably “pillars of society”.
They let me take out a loan for £400 which really I couldn’t afford to repay back within 30 days (which they knew based on the monthly income details I put in when I opened my account) but unfortunately my car needed repairing else I would lose my job. After avoiding them for 2 weeks after I should have repaid I gave in and phoned them to explain I could afford it and in all fairness they have set up a payment plan, however they decided how much the payments were and over how long of a period so that the repayments are huge. I took a while to sort this out so I owed over £600 at this point but the interest is frozen as long as I don’t default on a payment