Cuddly puppets axed as Wonga attempts big clean-up

 
Still from Wonga ad with puppet grandparents

After its regular appearances as the whipping boy for all that is bad in payday lending, Wonga is attempting to offer a new face to customers - and its critics.

Andy Haste, the former chief executive of the insurance giant, RSA (owner of More Than), is to become chairman of the company and his first job will be to announce a review of how the business operates.

Part of that will be to clean up Wonga's advertising and Mr Haste told me that the Wonga grandparent puppets will go.

He said Wonga did not want to be associated with "anything which inadvertently attracts children".

Mr Haste will also look at advertising during children's programmes as part of the review. The payday loan sector as a whole has been criticised for advertising during children's programmes.

Ofcom is already looking at the situation.

Respectable

Mr Haste says he wants to change the type of business Wonga is, even if that means it makes less money.

"Our goal is to deliver the original vision for Wonga - to provide short-term lending to the right customers in a responsible and transparent way," he said today.

"We will become a more customer focused, and inevitably in the near term, a smaller and less profitable business.

"However, we are determined to make the necessary changes and serve our customers in the right way, to repair our reputation and become a business with a long-term future and an accepted place in the financial services industry."

The review will look at six areas:

  • strengthening affordability for customers;
  • tightening lending criteria;
  • the total cost of the credit to customers, rather than just the weekly repayment amount;
  • advertising and not appealing to the young;
  • a technology overhaul;
  • and working more closely with regulators.

Wonga has faced its fair share of criticism - not least the recent revelation that it sent out fake legal letters to its own customers who were having problems repaying loans.

Whether this process by Mr Haste will gain them more trust from their customers or politicians remains to be seen.

But, for Mr Haste, at least, this is the start of a process he hopes will make Wonga respectable.

Update 11:20

Andy Haste has said that he will "embrace" any interest rate cap set by the Financial Conduct Authority, which took over regulation of the payday loans sector in April.

It was reported at the weekend by The Sunday Telegraph that a new cap could be announced as early as this week.

 
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  • rate this
    +1

    Comment number 669.

    They lend to people on benefits, thats wrong! we should look at setting up a P2P lending fund for those who want short term loans who can pay back within the agreed time! come on Zopa!

  • rate this
    0

    Comment number 668.

    Just announced..The FCA now propose to limit interest chargeable.
    As I said @652
    'investors'(read here Tory/Lib/UKIP speculators) have decamped to the flourishing e-betting & e-pay games market...now sleazing in £50bn year cost free 'free money'.
    No debts...no risk...same silly burghers sloshing their 'hard-earned' cash into 'having fun'.
    Gambling on-line...better than coire...so they say

  • rate this
    0

    Comment number 667.

    Consider facts

    Banks get money for FREE.
    Base Rate 0.5% / year
    Mortgages 3% to 6% / year
    Savers 1.4% / year
    The old 'usury' rate of 42% / year. (as abolished by Thatcher.)

    Pay Day Lenders 1700 % / year (after the new 'limitations')
    Totally absurd

    Debt has to be repaid.

    (There are some mortgage borrowers who will not be able to repay there when rates rise to rational levels of 7.5% to 10%!)

  • rate this
    0

    Comment number 666.

    #665 Ben777 if it was possible to run a payday loan company charging lower rates than Wonga, and still make a profit, then somebody would be undercutting Wonga.

    The rates are sky high because they are unsecured, made without credit checks, to people who have a high probability of not repaying.

    A government scheme would be yet another subsidy for the feckless and the lazy

  • rate this
    +1

    Comment number 665.

    We don't need the likes of Wonga, since the UK now owns major stakes in high street banks, we could provide short term loans at reasonable rates via our banks.

  • rate this
    +1

    Comment number 664.

    Don't give Hazlitt the time of day.He/she has stated they do not believe in democracy & the only liberty they believe in is the right to own property.They are not talking about you or me owning a house or a small piece of land,but the right for the very few to own virtually everything,which they already do.They are talking about the right to own the "means of production".It's why we need govt.

  • rate this
    -1

    Comment number 663.

    Here's a good idea..put caps on charges that payday loan companies can make. They then won't make enough money and will shut down, forcing the plebs who need them to go to unregistered, unlicensed money lenders who won't use friendly tactics to recover the debts. Oh wait, HM Gov has already had that idea an put it forward...what a bunch of divs.

  • rate this
    +2

    Comment number 662.

    Today the FCA proposes 0.8% per day and a maximum of 100%. Industry reaction is to say most payday lenders will now go out of business.

    In one comment that sums up the busines model of pay day lenders. To target the most vulnerable who are unlikley to pay back on time so charges skyrocket, loans are rolled over and their profits are inflated.

  • rate this
    0

    Comment number 661.

    660.John
    Regulation can only be created and enforced by government...
    =
    Not entirely true. But, even a laissez-faire market has a role for government; with laws enforcing contract rights, protecting property rights, and protecting against fraud.

    If government couldn't do favours for business, business could then only grow by please you, the consumer, society, better then the competition.

  • rate this
    +1

    Comment number 660.

    658.Henry H You are totally wrong.

    Regulation can only be created and enforced by government and the rule of law.

    The problem lies in the way that government has been totally corrupted by big business. Rather than providing regulation that is aimed at protecting the people it provides regulation that protects big business.

    This is caused by the absence of ethical and moral standards in HMG.

  • rate this
    +3

    Comment number 659.

    656 - Fishermans Enemy "...educate at school level..."

    Could not agree more. Managing personal finances is one of the most important skills one needs in order to live day to day & more importantly, plan for one, or ones family future & of course, retirement.

    When I attended school, a basic understanding of finance was taught. It does not suit our political masters to allow education now.

  • rate this
    0

    Comment number 658.

    657.John_from_Hendon
    You don't understand that capitalism IS regulation of monopoly markets.
    If you oppose monopolies, then you must oppose government, because government is a monopoly, of violence, which it uses to do favours for friends, like using the force of taxation to steal from every man woman and child to save and pay bankers' bonuses that the market tried to eliminate from the market!

  • rate this
    +2

    Comment number 657.

    650.Henry H it is not the size of government that matters it is the understanding that capitalism REQUIRES regulation of monopoly markets. AND NOT doing favours for friends.

    Tory reshuffle - still not an ethic between them!

    645.Parallel

    Translation: pony = £25 (cockney slang)
    dosh = money (from the price for a bed to 'doss' or bed down on in an inn (prob. Elizabethan) now - sum of money.

  • rate this
    +3

    Comment number 656.

    @654 I agree with you that we should educate, rather than legislate. However, we shouldn't have to offer debt advice for those desperate people who use PDL's.

    We'd be far better off educating at school level about budgeting, so that they can make an educated choice. Currently, thats not part of the curriculum. You have to ask, why that is? Those in power have protecting their vested interests?

  • rate this
    +2

    Comment number 655.

    599 - Tio Terry "no one should rely on the State"

    In an ideal world I would agree, but reliance is difficult to eliminate. However, your synopsis ignores a very important factor,ie, just how much the State, financal institutions, foreign aid & a plethora of other rely on citizens & as Henry states, it is legally enforced

    So, the reliance is actiually a two way street biased towards State!

  • rate this
    0

    Comment number 654.

    Unless someone steps in to offer debt advice to the people who now can't get pay day loans their only option will be to seek out the real loan sharks, and they definitely aren't known for their cuddly disposition if you don't pay them back.

    Sometimes it is better to educate rather than legislate.

  • rate this
    0

    Comment number 653.

    Think what you will of Wonga, at least they're not forcing anyone to go to them. They operate purely on a voluntary basis.

    The same cannot be said of the State. Our lying warmongering government is not only content to oppress our economy with a huge impoverishing Welfare Nanny Sstate, it also steals the wages of every man woman and child by force. Talk about immoral.

  • rate this
    0

    Comment number 652.

    The 'problems' 'payday loan sharks' face is that 'investors'(read here Tory/Lib/UKIP speculators) have decamped to the flourishing e-betting & e-pay games market...now trough-ing in £50bn per annum in virtually cost free 'free money'.
    No debts...no risk...same silly burghers sloshing their 'hard-earned' cash into 'having fun'.
    Gambling on-line...better than coire...so they say

  • rate this
    -1

    Comment number 651.

    Perhaps the government would do better capping the wages and benefits of 'the top' to say 20x the lowest paid worker on their staff. This would encourage a little more fairness and remove the need for the poor majority of this country to starve for the 0.0001% who have 99% of everything.

  • rate this
    +1

    Comment number 650.

    It's no coincidence that as government becomes larger, so too does the wealth inequality!

    Government, with regards to prosperity, only destroys it, and spreads the misery around.

    Wonga isn't to blame for our economic woes, increasing the population of folks living on the edge. What is? An oppressive & economically interventionist huge Welfare State. Cut government down, we'll do the rest :D

 

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