Wonga, Britain’s largest payday lender is getting a lot of bad press at the moment. Good. According to Wonga’s own website (as at 12/11/2014), the interest they charge on a representative loan of £150 over 18 days is 365%. This equates to an APR (annual percentage rate) of 5853%. I read in The Week (my favourite weekly news digest) that:
“Borrowing £400 from Wonga at its standard rate for seven years would leave you owing more than Britain’s national debt.”
This Week Issue 990
The financial authorities have finally stepped in to call time on the money lenders. By January 2015, the interest rate on payday loans will be limited to 0.8% per day and they will be a fairer cap on penalties for late payment. And about time too. Let’s hope that these legalised loan sharks preying on the poor and the desperate (and sometimes the feckless) will soon go the way of the dodo – and that investors will lose their Saville Row shirts. Now, what to do about the fat cat tax cheats stashing away their shillings in the Cayman Islands?
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We had it bad here and I believe there have been some improvements but that was a few years ago. I’m not sure it the situation was as bad as yours. I’m still having a problem picking my jaw off the floor. 😮
It’s taken a while and a lot of misery but it these companies are finally on the way out. Of course, the danger is that the desperate will turn to real loan sharks. The good thing is that credit unions are back in the frame to take up some of the slack.
Scammers at every corner and no care of whom they take advantage.
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. . the system is working very well and exactly as it is supposed to, transfering wealth up the pyramid. You know the solution . .
Ah, but will it?
no ‘Yeah, but’ – get out there and be a drop in the bucket (I was going to say ;drip’ but thought it impolite 😉
I could never understand how Wonga was allowed to operate in the first place.
They’re not alone but I suspect few will last now, thankfully.