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Darkman

Has Anyone Invested In Wonga.com?

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I have some cash sitting around and it's not earning anything. Have interest rates improved anywhere yet? It's getting frustrating.

I heard all about Wonga.com and "payday loans" on the radio. It got me curious whether they are worth putting money into. Apparently these companies have a bad rep for their business model though (waiting for people to fail), and the Church of England intends to "compete them out of business" offering much lower interest charges for loans.

Have you invested with them or similar? And would you admit it if you had?

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I have some cash sitting around and it's not earning anything. Have interest rates improved anywhere yet? It's getting frustrating.

I heard all about Wonga.com and "payday loans" on the radio. It got me curious whether they are worth putting money into. Apparently these companies have a bad rep for their business model though (waiting for people to fail), and the Church of England intends to "compete them out of business" offering much lower interest charges for loans.

Have you invested with them or similar? And would you admit it if you had?

I work in Collections for a major bank and can confirm Wonga and such likes are pure evil. The irony being that the CoE actually did invest in them. Anyone who knowingly does so is morally bankrupt.

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Apparently Islamic banks operate by charging a flat fee to lend, because they can't profit by charging interest. A similar model for ordinary people wanting to lend could be a good idea, because it's less immoral.

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Am I confused or did Wonga used to be a social lending site? I remember one where as an investor, you could log on, view pitches individual would-be borrowers, and decide how much to lend to them, if anything. I always thought that's why Wonga used the three old gits in their adverts - I could see the idea appealing to a lot of older folks.

Now it seems to be all about payday loans at high short term rates. Have they changed their business model or am I hopelessly confused?

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Am I confused or did Wonga used to be a social lending site? I remember one where as an investor, you could log on, view pitches individual would-be borrowers, and decide how much to lend to them, if anything. I always thought that's why Wonga used the three old gits in their adverts - I could see the idea appealing to a lot of older folks.

Now it seems to be all about payday loans at high short term rates. Have they changed their business model or am I hopelessly confused?

You may be thinking of Zopa. Wonga has always been in the usury business as far as I can remember

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Apparently Islamic banks operate by charging a flat fee to lend, because they can't profit by charging interest. A similar model for ordinary people wanting to lend could be a good idea, because it's less immoral.

What's immoral about it? It's an atrociously bad deal that means you need your head examining to use them but unless there are loads of hidden costs too I don't see a moral issue.

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Why aren't Islamic Banks allowed to profit by charging interest? What actually stops them?

https://en.wikipedia.org/wiki/Islamic_banking

..

Islamic banking has the same purpose as conventional banking: to make money for the banking institute by lending out capital. But that is not the sole purpose either. Adherence to Islamic law and ensuring fair play is also at the core of Islamic banking. Because Islam forbids simply lending out money at interest (see riba), Islamic rules on transactions (known as Fiqh al-Muamalat) have been created to prevent this perceived evil. The basic principle of Islamic banking is based on risk-sharing which is a component of trade rather than risk-transfer which is seen in conventional banking. Islamic banking introduces concepts such as profit sharing (Mudharabah), safekeeping (Wadiah), joint venture (Musharakah), cost plus (Murabahah), and leasing (Ijar).

In an Islamic mortgage transaction, instead of lending the buyer money to purchase the item, a bank might buy the item itself from the seller, and re-sell it to the buyer at a profit, while allowing the buyer to pay the bank in installments. However, the bank's profit cannot be made explicit and therefore there are no additional penalties for late payment. In order to protect itself against default, the bank asks for strict collateral. The goods or land is registered to the name of the buyer from the start of the transaction. This arrangement is called Murabahah.

Another approach is EIjara wa EIqtina, which is similar to real estate leasing. Islamic banks handle loans for vehicles in a similar way (selling the vehicle at a higher-than-market price to the debtor and then retaining ownership of the vehicle until the loan is paid).

An innovative approach applied by some banks for home loans, called Musharaka al-Mutanaqisa, allows for a floating rate in the form of rental. The bank and borrower form a partnership entity, both providing capital at an agreed percentage to purchase the property. The partnership entity then rents out the property to the borrower and charges rent. The bank and the borrower will then share the proceeds from this rent based on the current equity share of the partnership. At the same time, the borrower in the partnership entity also buys the bank's share of the property at agreed installments until the full equity is transferred to the borrower and the partnership is ended. If default occurs, both the bank and the borrower receive a proportion of the proceeds from the sale of the property based on each party's current equity. This method allows for floating rates according to the current market rate such as the BLR (base lending rate), especially in a dual-banking system like in Malaysia.

...

I'd argue it's all semantics and in reality there is little difference.

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What's immoral about it? It's an atrociously bad deal that means you need your head examining to use them but unless there are loads of hidden costs too I don't see a moral issue.

You answer your own question mate. They ARE people whose heads need examining - which makes them vulnerable to insidious exploitation by those who are more clued-up and can easily take advantage of the gullible and retarded.

We rightly jail people for taking sexual advantage of those we deem vulnerable - is taking monetary advantage of those who are just as vulnerable not exactly the same thing....at least from a moral standpoint...?

I personally can't really separate the two - as essentially they both use exactly the same method to produce the desired result.

For example: The sad person whose brain for whatever reason can only understand getting the cash they need, and clearly does not comprehend what it costs them in the long term, who approaches Wonga is in the same position as the poor bairn who only sees the child-friendly character portrayed on TV that approaches Jimmy Savile's dressing-room wanting an autograph from the nice bloke off the telly.

That poor kid has no ability, nor life-experience that could possibly help them see any problem with agreeing to give Sir Jim a little "cuddle" in return.

What the characters in my examples above THINK is going to happen to them, and what ACTUALLY happens to them is the result of this tried-and-tested method used by the preditor-types in all species - including our own - since life began on this planet. Find the weaklings. Set the trap. Gorge yourself until you are sick of the easy-pickings. Rinse and repeat.

And all of us have been the victim of this method many times in our lives. Such as those middle-aged idiots you meet who are currently buying houses they can't afford with money they don't have as their pension plan. Rather a lot of them are in for quite a large "cuddle" in return for being that dumb...!

Wonga dot com is most certainly immoral. Not illegal in any way. But 100% immoral.

In fact, a lot more than 100% immoral if we're talking about Wonga's annual percentage rate... :)

XYY

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Wonga dot com is most certainly immoral. Not illegal in any way. But 100% immoral.

XYY

4000% immoral! :blink:

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The difference with kids is that they aren't supposed to be out in the world entirely on their own. If someone truly needs their head examining that badly are they really fit to be let loose on the world? People have to take responsibility for their own actions and decisions; it's different if someone is actively trying to trick them.

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Why aren't Islamic Banks allowed to profit by charging interest? What actually stops them?

interestrateripoff's post gives examples and doesn't answer the basic question.

My understanding is that within Islam you cannot make a profit from something you haven't worked for, you need to use direct means to obtain your possessions. It's the same reason you cannot bet.

Quite laughable really given that most of the Muslim worlds wealth comes from digging holes and selling the products on at huge profits, mainly farmed out to third parties to further remove their direct involvement in the process. The profits are then reinvested in to horse racing and foreign business schemes.

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What's immoral about it? It's an atrociously bad deal that means you need your head examining to use them but unless there are loads of hidden costs too I don't see a moral issue.

The real juicy costs come when the payment is late....they are hoping a fixed cost pay day loan turns into two pay days or longer wonger loan. ;)

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The real juicy costs come when the payment is late....they are hoping a fixed cost pay day loan turns into two pay days or longer wonger loan. ;)

How buried away in the small print are those costs? There's definitely an immoral argument if they have been deliberately hidden with the intention of catching people out.

Personally speaking I feel that Wonga should be wiped off the planet but I'm not sure that I can come up with a rational reason why that doesn't result to the type of "People need nannying" argument, a position I despise, feeling that people should be responsible for themselves.

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How buried away in the small print are those costs? There's definitely an immoral argument if they have been deliberately hidden with the intention of catching people out.

Personally speaking I feel that Wonga should be wiped off the planet but I'm not sure that I can come up with a rational reason why that doesn't result to the type of "People need nannying" argument, a position I despise, feeling that people should be responsible for themselves.

No excuse to rip off for greedy selfish gain, mostly silly, needy, naive people......they need educating and better options not exploiting. ;)

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No excuse to rip off for greedy selfish gain, mostly silly, needy, naive people......they need educating and better options not exploiting. ;)

If there's a business case for it better options should appear by themselves. It's up to people to educate themselves once they're no longer children. If they're silly, greedy and naive then it's their own fault if they dig themselves a hole, or they're not fit to be let loose on their own in society. How do you interfere without more nannying?

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How buried away in the small print are those costs?

They're not buried at all. They're in big type on pretty much all their advertising material (and on the front page and FAQ sections of their website, above the "how do I apply?" section). You can complain about the ethics of such expensive loans, but you cannot claim that they are trying to deceive. Their web site is very clear in terms of their charges and don't try to hide anything; there is no legalese, it's all written in basic English that even a child would understand.

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They're not buried at all. They're in big type on pretty much all their advertising material (and on the front page and FAQ sections of their website, above the "how do I apply?" section). You can complain about the ethics of such expensive loans, but you cannot claim that they are trying to deceive. Their web site is very clear in terms of their charges and don't try to hide anything; there is no legalese, it's all written in basic English that even a child would understand.

It's a legal requirement that percentage rates and payments are displayed in a large (specific) font size in advertising, either in print or a website.

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They're not buried at all. They're in big type on pretty much all their advertising material (and on the front page and FAQ sections of their website, above the "how do I apply?" section). You can complain about the ethics of such expensive loans, but you cannot claim that they are trying to deceive. Their web site is very clear in terms of their charges and don't try to hide anything; there is no legalese, it's all written in basic English that even a child would understand.

So it's bloody obvious what anyone is getting themselves in to, they're not forcing anyone to use their services, they're not deceiving anyone, so what's the issue?

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Guest eight

So it's bloody obvious what anyone is getting themselves in to, they're not forcing anyone to use their services, they're not deceiving anyone, so what's the issue?

So let me ask you - if somebody took out one of these loans and was unable to repay it for whatever reason, do you think the debt should be allowed to grow at 4000% until repaid or the borrower bled dry, and presumably ultimately bankrupted?

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So let me ask you - if somebody took out one of these loans and was unable to repay it for whatever reason, do you think the debt should be allowed to grow at 4000% until repaid or the borrower bled dry, and presumably ultimately bankrupted?

If it's made clear that that's what the deal is then they shouldn't take it if they're not prepared to face that risk. As I keep saying it's about personal responsibility. It all sounds very much like being stopped from eating, drinking, smoking doing this, that, and the other because they're all bad for you - yes, they may be but it's up to me to decide whether or not to do them and not "nanny knows best, we're regulating what you can do to stop you hurting yourself."

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Should someone who is in such desperate need that they end up with a high cost loan actually be offered one, since they're clearly already unable to pay?

In theory, no-one who is short of money should ever be offered more debt - it's the very last thing they need.

These loans are predatory, and designed to push people into a continuous debt spiral which is hard to escape.

Do they need it though? If they truly do otherwise they'll starve to death then you've got a point, but under those circumstances not letting them have anything would be even worse. If they don't truly need it but can get away with tightening their belt then they should do that instead. If it's possible to offer much more reasonable solutions then where are they? They should be putting the likes of Wonga out of business in no time.

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Hang on ! I am appalled that these 4000% interest companies are allowed to exist!

I certainly would not invest in them, but I am not a vicar! :huh:

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I dont even know how to invest in Wonga.com. It is not listed. It is probably one of these that restricts investment to the elites to get them on side to minimize probability of any restrictive laws.

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