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Wonga pulls controversial student loan page
Wonga has pulled the section of its website which suggested payday loans could be viewed as an alternative to making use of a student loan, following mass outrage yesterday.
The payday loans lender moved after a huge amount of negative media coverage, including being accused of 'predatory' tactics by the National Union of Students.
An interest rate of 4,000%+
As we explained in Uproar as Wonga targets students with payday loans, such a form of lending is completely inappropriate for students who do not have a regular income in the first place, while promoting a loan with an APR in excess of 4,000% as an alternative to a student loan is pretty outrageous.
Here's how payday loans work.The idea is that you only borrow the cash for a very short time period, say a month. If you then pay that loan off after a month, the interest you pay seems reasonable enough. And because the loans are only designed as a short-term measure, the payday loan providers argue it's not fair to judge them based on the massive APRs.
Unfortunately, plenty of people who take out these loans don't manage to clear the debt after a month. So the amount they owe quickly ratchets up until it becomes completely unmanageable. And then that 4,000% rate of interest starts to look all too accurate.
"We don't target students"
Wonga has now issued a statement, explaining why the page existed in the first place, and why it has now been changed. Here's what it had to say:
"We listen to our customers and public opinion, so it was clear the old article here gave rise to misunderstandings. We would like to clarify that Wonga does not target students. Yet we do not discriminate against working, adult students who may choose to apply either, because all applications are assessed in the same robust and completely objective way.
"We make decisions based on thousands of pieces of public data, not someone's educational status. A student would need to have a regular income to be considered for a loan and students represent a miniscule proportion of our customers.
"The previous article on this page was several years old and one of many brief pieces we have written about the broad subject of credit since we launched our online loans service. No-one was directed to this page, nor was it prominently promoted on the website. In fact, the main purpose of the content was search engine optimisation, or 'SEO,' which is a common practice for any internet business that wants to appear in searches for relevant subjects. In our case, all things relating to loans and credit."
It's that last paragraph which is particularly laughable. Whether the page is a day old or several years old is irrelevant - payday loans have never, and will never, be a smart move for students. And while the phrase 'student loan' does indeed do well in terms of SEO, the fact that Wonga wants to bring in people who are searching for that term somewhat contradicts its claim that it does not target students.
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While on holiday this year, our Italian and Norwegian friends found it quite impossible to believe that these companies exist or are allowed to advertise on tv (and if you read the tiny writing at the bottom, some with a 4,000 apr!). Apparently in Italy, just before that crook Burlusconi was booted out you could not charge more than 15% on a loan. Well, we are worse than Italy then. Two governments have talked about if for 6 or seven years now here. Why don't they just ban it?
Saw Wonga advertising on ebay around Christmas. Made me really angry. Those old grannies they use would never borrow money this way. Our whole financial system is run by a bunch of morons but these are the lowest of the low.
I cannot believe the office of fair trading looked into these businesses and said they were giving a service. Absolute rubbish, the watchdog who could have done something siding with these roaches really makes me wonder if the oft really are there to look into what really is damaging. The oft report was published a less than a month ago and I start to wonder if they are run like the pcc supposedly an independent body run by the press they are supposed to help against. This country is corrupt throughout, how can anything be done about banks when they are able to give money to political parties for elections. These companies really are just legalised scum just like the clampers were , as long as tax is coming in the government wont care enough to do anything really decisive.
The real reason this country is in the mire is because the country allows these businesses to screw us over, power companies, banks oh and the biggest muggers of all the government.
Once again the vultures are circling, just like Cash4Gold and all these debt consolidation companies. You could also easily show that bookies and pawn shops open up new stores in only the hardest up and run down areas too. Kick them while they're down is the motto.
Laslty, is the writer of this article blind? You borrow £100 and the interest + 'charges' equal 36.72% in 1 month!!! That seems quite 'exorbitant' to me.
if people have money problems and have a bank account see the bank manager to see if you can get help dont go to these money grabbing bastards or go to cba because i am telling you these people dont give a ****
I agree with everything Robert Kelso has said.
Bottom line is this country is CORRUPT to the core.
INCLUDING THE GOVERNMENT!
but the banks etc are to blame, if it wasn't for them these places would never exist.
it's about time the government actually did something useful for the people get rid of these money shops and make the banks treat everyone equally.
A petition to government to outlaw predatory lending needs to be created against these firms.
Good idea so here we go:
Errol Damelin - Founder, CEO and general two-faced financial robber and leech.
Jonty Hurwitz - Founder, CTO and pretty much another financial 'highwayman' and parasite. Who by the way now churns out overpriced 'art' as a sideline. Most of it belongs in the fire-grate
Personal email addresses to follow...complain directly to them! If I can find their mobile numbers i'll list them too.
These two are pretty much to blame. They care nothing about morals or business ethics, it's simply just 'shafting' the general public for everything they have. I'd be surprised if MSN didn't re-write this story to 'omit' the comments or just delete it entirely. They're too weak these days to actually stand for anything.
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