Wonga's Typical Customers

[Tired of Waiting]

4 recent tweets by Faisal Islam ‏@faisalislam

2h ago

I asked Damelin if wonga knew how many customers were on benefits, and he said they typically were not

1h

Next retweet of @ChrisLeslieMP is out of intrigue rather than endorsement, re Wonga: opposition calling UK economy a "wonga recovery"

1h

This #wongarecovery thing strikes me as difficult territory for Labour, given proximate cause of wonga use is v high housing costs for young

56m

Based on my conversations with wonga execs ... Their understanding of their customers is young working people squeezed (I assume by rents)..

[Snugglybear]

Would that not make sense?

People on zero hours contracts, whose income is variable but who have to pay fixed costs per month. Borrow from Wonga* in a thin month and hope to work enough hours and therefore earn enough money the next month to repay the Wonga loan and pay that month's fixed costs. If not, borrow more money from Wonga.

A good proportion of workers on zero hours contracts are young i.e. under 25 (though not everyone).

*Other payday loan providers are available.

[Tired of Waiting]

Would that not make sense?

People on zero hours contracts, whose income is variable but who have to pay fixed costs per month. Borrow from Wonga* in a thin month and hope to work enough hours and therefore earn enough money the next month to repay the Wonga loan and pay that month's fixed costs. If not, borrow more money from Wonga.

A good proportion of workers on zero hours contracts are young i.e. under 25 (though not everyone).

*Other payday loan providers are available.

Yep, quite.

[Sour Mash]

Would that not make sense?

People on zero hours contracts, whose income is variable but who have to pay fixed costs per month. Borrow from Wonga* in a thin month and hope to work enough hours and therefore earn enough money the next month to repay the Wonga loan and pay that month's fixed costs. If not, borrow more money from Wonga.

A good proportion of workers on zero hours contracts are young i.e. under 25 (though not everyone).

*Other payday loan providers are available.

Presumably they don't have access to credit cards since using one in the scenario outlined above would make much more sense than taking out a mega-APR 'payday' type loan.

[dothemaths]

Presumably they don't have access to credit cards since using one in the scenario outlined above would make much more sense than taking out a mega-APR 'payday' type loan.

+1

[Maynardgravy]

How long until Wonga's 'too big to fail'?

[Monkey]

Presumably they don't have access to credit cards since using one in the scenario outlined above would make much more sense than taking out a mega-APR 'payday' type loan.

Maxed out?

Same as overdraft etc

Wongs et al seems a lender of last resort, and they give you the money in 15 mins, its online so depseration mixed with the quick fix is what gets them in....if you have to wait days for approval etc then people might change their mind. What would be an interesting stat, how many applicants have thr money going into someone elses account?

[zugzwang]

How long until Wonga's 'too big to fail'?

An interesting point. We know these payday lenders are essentially shells for the big boys to operate behind, so who's really pulling the strings at Wonga?

[little fish]

An interesting point. We know these payday lenders are essentially shells for the big boys to operate behind, so who's really pulling the strings at Wonga?

Owned by Errol Damelin and Jonty Hurwitz

The important bit - their houses

http://www.dailymail.co.uk/news/article-2207554/The-astonishing-homes-Wongas-fat-cats-tripling-profits-4-000pc-payday-loans.html

It’s now one of a handful of venture-backed companies valued at more than £1 billion. Backers include Balderton Capital, Accel (the investor behind Facebook) and — perhaps surprisingly — the Wellcome Trust. “And it’s still a start-up,” Hurwitz urges. “It’s still innovating. It’s shaken up the financial services industry, and its true success is still to be realised.”

http://www.standard.co.uk/lifestyle/london-life/the-two-main-aspects-of-my-life-are-art-and-big-data-meet-jonty-hurwitz-the-geek-sculptor-who-founded-wonga-8615219.html

Their profits

The private company, which has attracted sharp criticism from politicians, charities and the Archbishop of Canterbury, increased the sum it lent out by 68 per cent year on year to £1.2bn. Net profit rose by 36 per cent to £62.5m.

http://www.ft.com/cms/s/0/1ec19be8-147f-11e3-84b4-00144feabdc0.html?ftcamp=published_links%2Frss%2Fcompanies_financials%2Ffeed%2F%2Fproduct&siteedition=uk#axzz2dpr64uot

Edited September 3, 2013 by neontetra

[Executive Sadman]

4 recent tweets by Faisal Islam ‏@faisalislam

2h ago

I asked Damelin if wonga knew how many customers were on benefits, and he said they typically were not

1h

Next retweet of @ChrisLeslieMP is out of intrigue rather than endorsement, re Wonga: opposition calling UK economy a "wonga recovery"

1h

This #wongarecovery thing strikes me as difficult territory for Labour, given proximate cause of wonga use is v high housing costs for young

56m

Based on my conversations with wonga execs ... Their understanding of their customers is young working people squeezed (I assume by rents)..

The wonga recovery looks strangely similar to the 2001-2007 wonga boom!

[Executive Sadman]

How long until Wonga's 'too big to fail'?

When they start dishing out non-exec roles to money grabbing politicians?

Its quite disturbing to see how wonga has been targeted by the criminal political establishment, the same establishment who fawn over the 'innovative' city, who basically push the same thing.

The only explanation is that politicians are upset they arent getting a cut of the profits. We've spend/devalued/thieved £375bn to date to prop up the city...how much has wonga cost us? In the grand scheme of things, theyre saints.

[Errol]

It goes without saying that the only people who would use this service are people who are absolutely desperate.

[spyguy]

It goes without saying that the only people who would use this service are people who are absolutely desperate.

Or innumerate.

AS I explain to mum about houses - What's the percentage on the loan?

And she replies: 'I don't know percentages. I'm sure the bank would not lend people money they cannot pay back.'

[XswampyX]

Some interesting information here :- http://www.charisma-network.net/finance/leaky-data-how-wonga-makes-lending-decisions

If it turns out that those that use one search engine rather than another tend to default on their loans more, then this may well be significant. Wonga has revealed that even the time of day a user accesses the site feeds into their calculations. Other mundane information we routinely leak includes the particular version of the browser we are using (up to date, or not?), our operating system, screen resolution, internet service provider, and so on.

When you add together all the potential sources of leaked information that I’ve covered – and I have likely only scratched the surface – you can see how Wonga might begin to get up to the 8,000 data point mark. Once the Facebook app is up and running, it is reasonable to expect this figure to climb.

It's big brother but with a puppet mask on and his hand in your wallet.

Nice!

[Charlie The Tramp Returns]

It appears Wonga have found a way not to show their APR at the base of their TV adverts. A touch of come on in we let you know how much you pay up front if you don`t want it don`t take it. Makes the victim look no further once they have been seized in the true darkness of hell known as their website. Justin should carry out an exorcism then turn them into good disciples.

[interestrateripoff]

Can Wonga borrow from the BoE discount window?

[Snugglybear]

Presumably they don't have access to credit cards since using one in the scenario outlined above would make much more sense than taking out a mega-APR 'payday' type loan.

How would you get a credit card or authorised overdraft without a regular consistent income? The providers / banks want to know that you'll be able to make payments every month.

And the cost of having an unauthorised overdraft of, say, £200 for ten days with most banks is actually higher than the cost of borrowing the same sum from a payday lender.

[kilroy]

Owned by Errol Damelin and Jonty Hurwitz

The important bit - their houses

http://www.dailymail.co.uk/news/article-2207554/The-astonishing-homes-Wongas-fat-cats-tripling-profits-4-000pc-payday-loans.html

http://www.standard.co.uk/lifestyle/london-life/the-two-main-aspects-of-my-life-are-art-and-big-data-meet-jonty-hurwitz-the-geek-sculptor-who-founded-wonga-8615219.html

Their profits

http://www.ft.com/cms/s/0/1ec19be8-147f-11e3-84b4-00144feabdc0.html?ftcamp=published_links%2Frss%2Fcompanies_financials%2Ffeed%2F%2Fproduct&siteedition=uk#axzz2dpr64uot

Their profits

"The private company, which has attracted sharp criticism from politicians, charities and the Archbishop of Canterbury, increased the sum it lent out by 68 per cent year on year to £1.2bn. Net profit rose by 36 per cent to £62.5m.

"

I make that a return of roughly 5% which implies they start losing money if apr drops from 2500% to a mere 2495%.....

[ccc]

What's a £6 monthly charge on a £90 authorised overdraft work out as an Apr ?

This is what rbs have started charging recently.And £90 is the most they will give you on a standard account without going through a proper credit check / scoring etc. Even if you are a long term customer with regular large payments.

[Frugal Git]

My favourite thing about Wonga is the (not so) subtle way their adverts encapsulate society. A bunch of elderly people financially plundering the young. Wonderful stuff.

Edited September 3, 2013 by Frugal Git

[Executive Sadman]

It goes without saying that the only people who would use this service are people who are absolutely desperate.

Kind of like the people who sign up to 100% interest only mortgages...desperate to have a house.

However, the government likes this kind of desperate. They are on the hook for the rest of their lives and can be farmed as a voting group.

[Tonkers]

I can't even qualify for a Wonga loan as I walked away from debt, Injin style. There is no going back, thankfully. I don't even run that permanent overdraft any more

Edited September 4, 2013 by Tonkers

[little fish]

http://www.mirror.co.uk/money/city-news/wonga-profits-surge-one-million-2247075

Wonga says its customers are typically young, single, employed and digitally-savvy urban dwellers. Almost 80% of its customers own a smartphone, 77% regularly check Facebook, and all have a bank account.

http://uk.finance.yahoo.com/news/wonga-tougher-bad-debtors-112706758.html

Mr Raine said the average Wonga customer earns around £20,000, and that customers borrow an average of £180 the first time they use the lender. The average size of loan for all customers is £257.

So the typical wonga user is young, earns £20,000 a year, owns a smart phone, checks face book and has a bank account. This is not the impression I get from debt work. Any I have seen have been families with little or no income other than benefits and are aged mid 30's upwards.

That facebook is mentioned is interesting given that on-line activity is being tracked for use in compiling credit file information. Experian has a limited version at the minute. This link is American but will be applicable here soon (if not already being used).

http://www.digitaltrends.com/opinion/keep-calm-and-tweet-on-creditors-have-been-sizing-you-up-online-for-years/

[little fish]

Can Wonga borrow from the BoE discount window?

Maybe Wonga supplies the window?

[gilf]

It appears Wonga have found a way not to show their APR at the base of their TV adverts. A touch of come on in we let you know how much you pay up front if you don`t want it don`t take it. Makes the victim look no further once they have been seized in the true darkness of hell known as their website. Justin should carry out an exorcism then turn them into good disciples.

I suspect that's because they don't actually mention any specific loans. The adverts are just advertising the website and about how easy/quick the service is.

The second they mention a load amount then they have to show all the specific terms and conditions for that loan, including the APR is a specific font size.

Everybody now knows what Wonger offer on their site, they don't need to bang on about specific financial products, just the fact they exist.