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AdamoMucci

Wonga runs out of Wonga

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Due diligence means you lend money to those that can actually afford to pay it back....high risk, high cost sees that the people who say yes to any money at any price are less able to pay it back......a failed business model.  ;)

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4 hours ago, AdamoMucci said:

https://news.sky.com/story/10m-cash-call-rescues-payday-lender-wonga-from-insolvency-11460332

 

I must admit I got a little emotional reading this one and had to wipe a few tears away. The laughter has subsided now though as if they are being honest about the causes they may still eventually turn it round.

 

4 hours ago, Voice of Doom said:

I trust the representative APR will be in 4 figures.

Best laugh I've had all day.

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8 hours ago, AdamoMucci said:

I must admit I got a little emotional reading this one and had to wipe a few tears away. The laughter has subsided now though as if they are being honest about the causes they may still eventually turn it round.

9e5KS0z.gif

1 hour ago, whome_yesyou said:

Who takes on the bad debts if Wonga go down? I’d assume it’s not a jubilee for the borrowers.

Presumably the administrator will deal with the loan book and try to pawn it off for whatever it's worth.

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5 hours ago, whome_yesyou said:

Who takes on the bad debts if Wonga go down? I’d assume it’s not a jubilee for the borrowers.

Given that Wonga have already had to write off £220m of loans to 330,000 feckless morons customers, then yes I wouldn't be surprised to see further debt forbearance/forgiveness.

 

https://www.ft.com/content/8e818300-4a0a-11e4-8de3-00144feab7de

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2 hours ago, nome said:

Given that Wonga have already had to write off £220m of loans to 330,000 feckless morons customers, then yes I wouldn't be surprised to see further debt forbearance/forgiveness.

 

https://www.ft.com/content/8e818300-4a0a-11e4-8de3-00144feab7de

Which at first glance is rather shocking, but in truth is less than £700 per customer on average. It's not so much forbearance/forgiveness as keeping the indebted in debt and paying their masters.

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16 hours ago, winkie said:

Due diligence means you lend money to those that can actually afford to pay it back....high risk, high cost sees that the people who say yes to any money at any price are less able to pay it back......a failed business model.  ;)

They would argue that their business model was regulated out of existence by the APR caps introduced by the FCA.

Quote

Wonga, which employs about 500 people, has been loss-making for the last few years after encountering a string of regulatory hurdles such as the City watchdog's cap on the cost of short-term loans.

They only made the model work by punishing those who missed payments but continued to pay, keeping them in debt for years. Good riddance in my view - I am not against payday loans per se, but when it depends on the financial exploitation of those who get into trouble, the model needs restricting.

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8 hours ago, nome said:

Given that Wonga have already had to write off £220m of loans to 330,000 feckless morons customers, then yes I wouldn't be surprised to see further debt forbearance/forgiveness.

 

https://www.ft.com/content/8e818300-4a0a-11e4-8de3-00144feab7de

Thanks, the link is pay walled though.

So let me get this straight, people having had a loan with Wonga had it written off... and Wonga are still in business? What is going on? Is there any repercussions at all for the person that had the loan or is it just free money?

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I would imagine the ones that do repay at high cost are paying for those that don't repay...... perhaps the loan companies are replying on people who can repay paying the debts of those that can't repay.....amigos.😉

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1 hour ago, whome_yesyou said:

Thanks, the link is pay walled though.

So let me get this straight, people having had a loan with Wonga had it written off... and Wonga are still in business? What is going on? Is there any repercussions at all for the person that had the loan or is it just free money?

Just google ''wonga £220m'' etc and you should find plenty of articles.

 

To be honest I'm surprised that you're surprised by it... debt forgiveness/forbearance is already occurring on a massive scale from what I can see.

 

Have a quick look on the MSE ''Debt Free Wannabe'' forum for example... you'll see endless ''success stories'' of people getting all forms of debt written off or drastically reduced.

 

I personally know someone who has twice built up debts of around £30k, defaulted on repayments and ended up coming to informal settlements with the creditors to repay only around 30% of the outstanding balance.

 

Edited by nome

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21 hours ago, whome_yesyou said:

or is it just free money?

It's built into the interest rates...high default risk, high interest charge.

The cost to the loanee is reputational damage, which in a natural market would mean they are charged mroe and more interest fro future loans.

In today's unnatural State-violence-backed low interest rate environment, no one cares; debt is an asset.

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5 hours ago, Ash4781 said:

 another article 

UK's biggest payday lender Wonga 'on the brink of collapse'

https://www.theguardian.com/business/2018/aug/26/uks-biggest-payday-lender-wonga-on-the-brink-of-collapse

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On 04/08/2018 at 16:15, AdamoMucci said:

https://news.sky.com/story/10m-cash-call-rescues-payday-lender-wonga-from-insolvency-11460332

 

I must admit I got a little emotional reading this one and had to wipe a few tears away. The laughter has subsided now though as if they are being honest about the causes they may still eventually turn it round.

Who could have predicted that subprime lending would be such a bad idea...

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  • 153 Brexit, House prices and Summer 2020

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      • down 5% +
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      • up 5%



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