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+1 China.

For someone who is just about getting by to have an unexpected expense (car breaks down, boiler packs up, etc) could be a massive burden for them.  There is a real need and demand for this sort of short-term lending.

But the interest rate is a bit of a misnomer.  A regulated company offering a loan of £150 for a week but costing a fiver sounds fairly reasonable, doesn't it?  Regulation, staff, IT, advertising doesn't come cheap.  But that works out to be about 450% interest pa.  Where they became a bit morally ambiguous (at best) was the compounding penalties.  But how do you incentivise peoiple to pay back the £150 after a week and not take the mick?  Like the internet, it all works fine when both parties aren't being dicks, but human nature being what it is...

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What a silly comment. You clearly have never lived in the real world.

Also very true, I really never had any use for a bank until I needed to take out a mortgage. I saved for everything and still do!

You really should stop putting words into other peoples mouths china. Invariably you are off the mark. I take no delight in wonga going tits up. As andy says, the money has been well salted away by th

12 minutes ago, Chinahand said:

Lots of complex issues here.

I do find it incredible that people sign up for such rates of interest.  It does show the desperate straits people can get themselves into.

And if there isn't a company like Wonga to provide them some cash at a 1000% per annum what do they do?  Use loan sharks - unregulated, no compensation schemes or call centres but a far more unsavoury way of getting their piece of flesh back from the desperate.

It is a real dilemma for me, but having regulated companies with public oversight and a board of directors to be held to account is in my view far far better than old Harry with his dog and his lads wanting to get back what's there's.

I don't know what to make of the nanny state socialists who think people can't make a decision for themselves and insists on regulating and limiting everything.  They clearly think they know so much better than the person themselves what interest rate they can accept - except they don't and when Wonga can't run a business because the interest rates they wish to charge are above the cap the socialists have imposed the business doesn't dry up - it just goes underground and old Harry picks up the tab.

Wonga was meeting a genuine demand.  A demand which is a sad reflection of the hand to mouth living too many people fall into, but bankrupting Wonga hasn't made that world go away - it has just made old Harry a very happy man thinking of all that extra business which is going to come his way.

Stinky is delighted Wonga is gone - but Christ if you can't make a profit charging 1000% pa that is a salutary message.  Old Harry knows his manor, knows how to turn on the screws, doesn't worry about the Financial Service Regulator, or Interest rate Caps.  He just lends and recoups and if there's some menacing to be done, well it is worth it, especially now the desperate don't have a public, regulated business as an alternative to Old Harry and his roll of fivers.

Don't worry, they made a profit... its' just that the profit went into paying humungous salaries, bonuses, finance charges to their mates and dividends.

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You really should stop putting words into other peoples mouths china. Invariably you are off the mark. I take no delight in wonga going tits up. As andy says, the money has been well salted away by the scumbags running it. Do you see no irony in wonga folding to avoid their burdens while those with loans still have to pay back?  There was a guy borrowed 300 quid to find himself 2 years later owing 10 grand. Without the same options as wonga took. It's destroying peoples lives. A mental health issue which is preyed upon. 

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1 hour ago, the stinking enigma said:

The reason wonga are folding china is nothing to do with the "socialist imposed cap". It's because they don't want to pay compensation imposed because they targetted vulnerable people. I can accept that in your world you could construe that as socialist interfering.

They were crooked money lenders

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1 hour ago, Max Power said:

If it were not for the mafia bankers these payday loan companies wouldn't exist. The bastards need to re-calibrate their lending policy for those on low salaries and not be so greedy.

Banks lending to people that couldn’t afford to repay was what caused the global crisis in 2008. But I agree they’ve gone somewhat the other way. 

I’ve mixed feelings on Wonga - there’s clearly a need for short term loans to ease cash flow problems that all of us can have from time to time (never used them myself, but I’ve certainly used credit cards and overdrafts) - but when you hear of a £300 loan turning into 10 grand something is wrong. 

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3 hours ago, the stinking enigma said:

You really should stop putting words into other peoples mouths china. Invariably you are off the mark. I take no delight in wonga going tits up. As andy says, the money has been well salted away by the scumbags running it. Do you see no irony in wonga folding to avoid their burdens while those with loans still have to pay back?  There was a guy borrowed 300 quid to find himself 2 years later owing 10 grand. Without the same options as wonga took. It's destroying peoples lives. A mental health issue which is preyed upon. 

I'm really pleased Wonga has gone tits up, along with a few more dodgy Arfur Daley dealers,  my shares in another "reputable" lender have now started to recover nicely.

 

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I don't think Wonga ever paid a dividend to its shareholders (definitely the case up to 2014).

It burnt through £90 million of investor's money and the shareholders are highly unlikely to reap a penny from it.

It has gone bankrupt.  That is absolutely an option to any individual who cannot repay their debts.  An individual is basically no different than a corporate entity.

I don't doubt getting into debt has destroyed many people's lives, but individual responsibility has to mean something. 

Wonga did meet a need, and did it far better than a loan shark.  

 

 

 

 

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2 hours ago, twinkle said:

I'm really pleased Wonga has gone tits up, along with a few more dodgy Arfur Daley dealers,  my shares in another "reputable" lender have now started to recover nicely.

 

You mean your “tab” at the Whitestone ?

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22 minutes ago, Chinahand said:

I don't think Wonga ever paid a dividend to its shareholders (definitely the case up to 2014).

It burnt through £90 million of investor's money and the shareholders are highly unlikely to reap a penny from it.

It has gone bankrupt.  That is absolutely an option to any individual who cannot repay their debts.  An individual is basically no different than a corporate entity.

I don't doubt getting into debt has destroyed many people's lives, but individual responsibility has to mean something. 

Wonga did meet a need, and did it far better than a loan shark.  

 

 

 

 

Errol cashed in his shares a couple of years ago for a cool 17 million

https://www.google.com/amp/s/www.thesouthafrican.com/who-is-wonga-founder-errol-damelin/amp/

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2 hours ago, the stinking enigma said:

Errol cashed in his shares a couple of years ago for a cool 17 million

https://www.google.com/amp/s/www.thesouthafrican.com/who-is-wonga-founder-errol-damelin/amp/

Yes, he's come out of it comfortably. Maybe a bit like the LG directors? Although the money has disappeared in their case, obviously.

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23 hours ago, Chinahand said:

I don't know what to make of the nanny state socialists who think people can't make a decision for themselves and insists on regulating and limiting everything.  They clearly think they know so much better than the person themselves what interest rate they can accept - except they don't and when Wonga can't run a business because the interest rates they wish to charge are above the cap the socialists have imposed the business doesn't dry up - it just goes underground and old Harry picks up the tab.s.

It's a view which happens to be backed up by scientific research. As a conservative, and not even remotely a socialist, I believe we have a moral duty to protect the vulnerable from parasites and exploitative operations. If you want to talk about the nanny state, let's look at the drug laws as I think a lot of individual debt can be attributed to drug addiction and inflated drug prices.

Wonga's problems have nothing to do with caps imposed on their interest rates.

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