Sunday 29 June 2014

Wonga are in trouble again in the UK

Wonga, the "payday loan" company originally from the UK but also now in South Africa are in trouble again. This time, just like all the other times, it's entirely of their own doing.

This time they sent letters to their heavily indebted victims from fake law firms they created. According to a BBC report:
"An investigation by the regulator found that Wonga sent letters to customers from fake law firms called "Chainey, D'Amato & Shannon" and "Barker and Lowe Legal Recoveries", sometimes charging customers a fee for these letters.

The plan was to make customers in arrears believe that their outstanding debt had been passed to a law firm, with legal action threatened if the debt was not paid.

The Law Society has now called on police to look at whether the company committed an offence of obtaining pecuniary advantage by deception and blackmail, as well as offences under the Solicitors Act."
In the past they've been castigated by almost everyone you can think of in the UK including consumer experts, Parliament and the Archbishop of Canterbury. In particular they have been criticised for their astonishing interest rates.

Although it's probably unfair to use annual percentage rates to criticise a lender whose average loan length is apparently 17 days, it's still a useful comparison. According to Martin Lewis, a UK consumer expert, they charge an APR of 4,214%.

We have to make sure that they NEVER set foot in Botswana.

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