Wonga is one of Britain’s biggest short term loans providers and has a bright, breezy style with such a cheerful disposition that some of its ads have been censured and ultimately removed for being too “out of touch” with the people they were aimed at.
A reporter from the Guardian newspaper interviewed chief management and other staff at Wonga’s rather grand offices near Regent’s Park in central London, recently. The company has been spending rather a lot on advertising recently, about 16 million pounds last year– and is key to get its message across that it is a responsible lender that cannot be compared to some in the rapidly growing short term loans sector.
Wonga lends out small loans of between ₤100 to ₤1000 initially for a month and apparently discourages roll-overs. Its interest rates can hit upwards of 4000% in some cases. Typically, anybody who borrows ₤100 will be paying back ₤1 a day in interest.
The PR manager at Wonga, Darryl Bowman, likes to think of Wonga as being a service to meet the needs of the internet savvy, Facebook using young professionals and can’t understand the criticism that has been mounting as the stories of people suffering from mounting instant cash loan debt have been pouring in over the last few years.
Bowman says that the company refuses two thirds of the applications it receives and says that it is designed to rely on people repaying their loans. They definitely do not persuade people to default on their loans, he says.
The short term loans companies, Wonga being just one of more than fifty of the bigger, licenced short term loans providers, operate an instant cash service which involves an online application service. Applicants are usually not able to get quick loans from their bank or from using a credit card and turn to the payday lenders as there is nobody else to lend them money at short notice.
Because the online application system does not involve any checks, and is totally impersonal it is exceptionally easy. Some people say that they make an application using their i-phone one minute, and before they get to the ATM, they are phoned to say their loan is in place.
Critics of the instant cash loan industry seem not to be so taken in by the corporate style and the glossy marketing. Long term opponent of the high interest rates and lack of transparency that these companies have been criticised for, Stella Creasy, Walthamstow’s MP, believes there is a serious misunderstanding of the type of person they are dealing with and the seriousness of their situation by management at Wonga and other payday lenders that are trying to market themselves as “good guys”.