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Anyone else find the irony in this ?
Downside is once the fold anyone miss-sold a payday loan won't get any compensation...
I'll lend them some dosh*
*normal lending rate 37948% APR.
Cool.
If the debtors continue to pay back the loans then that’s fine, they shouldn’t be able to walk away without reducing thier debts to 0.
I would qualify that by saying, once the original debt excluding interest has been paid back.
Wonga spent a lot of money fighting the FCA’s cap on lending rates back in 14’ and it backfired massively. On both a communications level and media backlash at the rates investigation.
Question is who is next?
If the debtors continue to pay back the loans then that’s fine, they shouldn’t be able to walk away without reducing thier debts to 0.
I would qualify that by saying, once the original debt excluding interest has been paid back.
Loan book will be sold on and all original loan T&Cs will still be in force.
Yeah, kinda know that.
But that’s my take on it.
Surely collapse is inevitable now? Hopefully the investors will lose all their cash! 😂
Just been listening to this on R4. Basically sounds like current borrowers still have to pay outstanding debts (obviously) but now (or V.Soon) Wonga wont have to pay out the potentially £10's of Millions in compensation claims they have just been exposed to...
but now (or V.Soon) Wonga wont have to pay out the potentially £10’s of Millions in compensation claims they have just been exposed to…
Hmm...what a very convenient time to go "bust"...
Just been listening to this on R4. Basically sounds like current borrowers still have to pay outstanding debts (obviously) but now (or V.Soon) Wonga wont have to pay out the potentially £10’s of Millions in compensation claims they have just been exposed to…
I heard that too. An interesting point was that on average it costs Wonga more to process a mis-selling claim than the amount it received in interest, regardless of whether or not the loan was mis-sold and compensation is/ isn't due. Claims companies know this so they aggregate claims, drop them on Wonga by the thousand, and start the clock for the eight-week resolution limit, with the aim of getting Wonga to approve the claim regardless of its merits.
Yip.
All the major Banks pay out more in claims than what the original agreement cost.
PPI is an example, it’s cost more to rectify than the original agreement.
Also, selling bad debt books isn’t as lucrative as it once was. There are few firms willing to stump up 40% (thereabouts) of the total book debt as a purchase figure. Basis of defer against loan is high in this instance because defaults are high.
Risky.
Lend us £40m..
but now (or V.Soon) Wonga wont have to pay out the potentially £10’s of Millions in compensation claims they have just been exposed to…
Hmm…what a very convenient time to go “bust”…
It's the reason they are going bust, swamped with huge claims and now they are more strict lending, they don't have the revenues to afford the claims.
The administrators will probably sell on the outstanding debts so yes current borrowers will have to continue paying. Any cash they raise will be used to settle outstanding liabilities but it’s hard to see this covering all the potential claims.
PPI is an example, it’s cost more to rectify than the original agreement.
Wonga claims have risen as PPI is tailing off, so all the claims firms have jumped on the pay day loan bandwagon and killed the goose which was laying their eggs...
@Bikebuoy - I'd imagine that there are bad book debts and Wonga's Bad book Debts. I bet the bad book debt of Wonga is folk that borrowed £50 for a car tyre and ended up owing £11k (actual case quoted on yesterday's radio 4 news).
If you had to borrow £50, there won't be a chance in hell you will be able to repay £11k!
Exactly, risky innit.
Chance of getting that £11k back ?
0%
I’ve sold bad debt books off in the past, for large Banks.
Wonga ‘on verge of collapse’ after accidentally lending itself £50
https://www.suffolkgazette.com/business/wonga-collapse/
Lets think about those that may be out of jobs - there's at least one regular on here who might be and I suspect is refraining from comment deliberately. Not a pleasant situation to be in.
Absolutely kryton. I hope he(and the others) comes out of it ok
Wonga is another case of 'taking the piss' and being punished for it.
Sometimes big greedy organisations get cocky, they'll pursue immoral practices too far thinking "well, the law is on our side" but they forget for all the bullshit that goes on in politics, believe it or not, the Government does actually work for the people, well at least partly and they write the law.
The Government and BOE like 'punishment deals' like the PPI deal, make no mistake, the PPI ruling was punishment not only for running the scam for so long, but also for the Banking Crisis, it was a great move because nothing boosts an economy like millions of people being given a windfall, lots will splash with it.
It also helped the Banks, they were allowed to make massive allowances for loses against profits for years for potential claims in years when they needed support, not to mention they've also paid out lots and lots of claims to customers who never see a penny of it for old defaulted loans, CCs etc.
The Payday ruling was another punishment deal, other payday lenders wrote off and repaid millions without being asked by their customers, some even went so far as to remove historic bad data from credit histories because their practices were so crooked. I haven't seen the figures, but the court with guidance from the FCA will have and they will likely have considered the potential cost to Wonga and their ability to withstand it and ruled in a way that meant if they rolled over and just gave people's money back they would have survived, but as above they didn't, they argued every case even if cost them more than the claim.
When Wonga goes under, and it will, it will be interesting to see what happens to it's customers, some of them could see real hardship in the next month or so, they would have been rolling over loans for months, even years and won't be able to, they probably won't be able to shift to another provider so will either have a decent chunk of their wages taken from them, or default. Hopefully they can weather the storm for a month and the cycle is broken, frankly given the state of the average Wonga customers credit file it wouldn't hurt them to default and leave Wonga holding the can,I hope they do.
<div class="bbp-reply-author">Kryton57
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<div class="bbp-reply-content">Lets think about those that may be out of jobs – there’s at least one regular on here who might be and I suspect is refraining from comment deliberately. Not a pleasant situation to be in.
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Whatever you think about how the UK is doing, and what may happen, we do have record employment at the moment. It's a shit place to be, I was in RBS during the crash and lost my job, but however they've moralised what they do, they work for a firm that does harm, no ifs or buts, it's a parasitic industry.
I understand the worry, I know the stress, but they shouldn't be out of work long and they'll sleep better when they've left.
Wonga have gone bump.
Admin in, Wonga out.
Lend us some cash, sniff.
Shit state of affairs. Makes you wonder what lower life will come to the aid of the poor (literally) buggers that used them to make ends meet.
Wonga customers credit file it wouldn’t hurt them to default and leave Wonga holding the can,I hope they do.
There is never any cash to pay the bills but the people who owe will be hounded by whomever buys the debts
Lets think about those that may be out of jobs
Not really. Same as I wouldn't give a shite about a munitions factory going bust.
Nice ^^^ God forbid that you have a wife, kids and mortgage and suddenly lose your job.
Well maybe it will give them a taste of the misery that their former employers have been dining on all these years.
Nice take on it in the Grauniad...
https://www.theguardian.com/business/2018/aug/31/wonga-borrowing-payday-lender