CAB joins forces with Wonga

[Nick Pearson]

Interesting story in "The Guardian" see http://www.guardian.co.uk/money/2012/may/20/citizens-advice-wonga-research?newsfeed=true

[NEDCAB Lady]

Interesting story in "The Guardian" see http://www.guardian.co.uk/money/2012/may/20/citizens-advice-wonga-research?newsfeed=true

 

Hi

 

Very interesting

[Wintry]

Interesting story in "The Guardian" see http://www.guardian.co.uk/money/2012/may/20/citizens-advice-wonga-research?newsfeed=true

 

Oh dear Nick

 

Whatever this is all about, the headline does not look good, well done:)

[renegadeimp]

Sounds like this "research" is more along the lines of showing wonga in a favorable light since they are aiming for bigger things, such as becoming a bank.

[Bang!]

Wandering a bit - but I was trying out a free call recorder out of curiosity. Well, not truly free, but had an advertising company as a sponsor.

 

Although it ran in the background - when entering the settings it showed an ad - which frequently was Wonga. Funnily they largely fall into the type of call often advised here not to make unless recording.

 

So its the second unusual position they seem to have been in today.

Edited May 21, 2012 by Bang!

[sequenci]

Great timing:

 

http://www.oft.gov.uk/news-and-updates/press/2012/40-12

 

OFT requires Wonga to ensure improved debt collection practices

 

40/12 22 May 2012

 

The OFT has required Wonga.com Limited and some of its associates (Wonga) to ensure that aspects of their debt collection practices are acceptable.

 

The OFT action follows statements made by Wonga to customers in two types of written communications and in the wording of one call script.

 

Without having appropriate justification the letters or emails suggested that customers may have committed fraud and that Wonga would consider contacting the police if customers did not act as Wonga requested.

 

The wording in the call script stated that customers with jobs in the public or financial sectors should not find themselves in debt, and that this was stated in their terms of employment.

 

As a result, the OFT has imposed a requirement on Wonga that its communications must not, without appropriate justification:

 

allege that a customer has, or may have, engaged in criminal conduct or refer to the consequences of such conduct

state that a customer should not be in debt if the customer has a certain employment status or for any other reason.

The letters and emails were sent to customers who had claimed money back from Wonga by asking their card providers to reverse a payment made to the company. They were also sent to some customers who had entered into debt management plans.

 

David Fisher, OFT Director of Consumer Credit, said:

 

'We have acted to ensure that Wonga does not behave this way again. I would like to make it clear to businesses that they must not adopt aggressive or misleading practices with their customers'.

 

The OFT launched an extensive review of the payday lending sector in February. It expects to announce its findings and strategy to raise standards across the sector later this year.

 

NOTES

 

1.The OFT's decisions to impose requirements may be appealed to the First-tier Tribunal (Consumer Credit). Details of all recent OFT actions are on the public register.

2.Download the detailed requirement imposed on:

 

Wonga.com Limited (pdf 43kb)

Samedaycash Limited (pdf 43kb)

Quickbridge (UK) Limited (pdf 43kb)

Wonga Customer Services (Pty) Limited (pdf 44kb)

Wonga International SA (pdf 44kb)

Wonga Technology Limited (pdf 43kb)

3.Under the Consumer Credit Act 1974, where the OFT is dissatisfied with any matter in connection with a business, a proposal to carry on a business or any other conduct by a licensee, associate or former associate, the OFT may impose requirements on the licensee. Requirements may require a business to do or not to do (or to cease doing) anything specified to address the OFT's dissatisfaction, or securing that matters of the same or similar kind do not arise.

4.Failure to adhere to a requirement can lead to the imposition of a fine of up to £50,000 (per instance) and may, under certain circumstances, indicate that a licensee may not be fit to hold a consumer credit licence.

5.The OFT has issued specific guidance for all businesses engaged in the recovery of consumer credit related debts. The Debt Collection Guidance sets out the standards expected of all business engaging in the activity including creditors, law firms and tracing agents as well as traditional debt collectors.

.

[Nick Pearson]

Payday laon amendment to Financial Services Bill defeated in commons last night. http://www.huffingtonpost.co.uk/2012/05/22/attempts-to-cap-pay-day-loans-defeated-in-parliament_n_1537017.html?ref=uk

[Nick Pearson]

Payday loan amendment to Financial Services Bill defeated in commons last night. http://www.huffingtonpost.co.uk/2012/05/22/attempts-to-cap-pay-day-loans-defeated-in-parliament_n_1537017.html?ref=uk

[Wintry]

Payday loan amendment to Financial Services Bill defeated in commons last night. http://www.huffingtonpost.co.uk/2012/05/22/attempts-to-cap-pay-day-loans-defeated-in-parliament_n_1537017.html?ref=uk

 

Hi

 

Not good Nick, but no surprise.

 

More heartbreak for those in debt (especially the most vulnerable) and extra work for the overwhelmed free debt advice sector.

 

The timing could not be worse for the CAB headline.

 

Makes you wonder what this lot are going to come up with reagarding the Debt Management protocol, any news on that yet Nick?

[Nick Pearson]

Perhaps the best I can offer is Mark Hobans comments in the commons a couple of weeks ago in response to an amendment to the FS bill calling for set up fees for DMP's to be probibited by the new FCA “…That is also why we have chosen to leave on the statute book the enabling powers of the Tribunals, Courts and Enforcement Act 2007. More immediately, we are working with the industry to develop a protocol of best practice for debt management plans, which should cover, among other things, the nature and timing of fees. Indeed, on 14 June the Minister with responsibility for consumer affairs, my hon. Friend the Member for North Norfolk (Norman Lamb), will chair the first industry-wide meeting to discuss and take forward the protocol. That will follow several months of meetings with a smaller, representative group of stakeholders, which has talked through processes, commercial terms and advice, to reach an agreed position.“I also wish to refer the House to new guidance for the debt management sector recently published by the Office of Fair Trading, which sets out in substantial detail the standards expected of firms. I believe that it is appropriate that we give time and focus to current efforts to improve standards in the debt management sector, and take account of the significant changes to the wider regulatory regime enabled by the Bill, before we start talking about changes to a potential statutory scheme….”

[Ell-enn]

Would be interesting to find out how many of the 266 who voted against have an "interest" in payday loan companies

[sillygirl1]

I second that, Ell-enn, maybe we could do an FOI request.

 

The OFT have shown yet again that they are not fit for purpose, we can prove that Wonga are behaving exactly the opposite from posts on this and many other forums on the internet.

 

Sadly the OFT seems to be 'jobs for the boys' and not interested in really becoming an effective regulator.

 

How many more people are trapped in the debt cycle due to PDL companies who haven't found this forum and are suffering real and actual hardship?

 

Do the companies care - no, all they care about is getting customer testimonials on their websites - these testimonials should not be taken lightly as they highlight the fact the companies want to be seen as a 'positive lending alternative' when they are nothing more than legalised loan sharks.

[Wintry]

Perhaps the best I can offer is Mark Hobans comments in the commons a couple of weeks ago in response to an amendment to the FS bill calling for set up fees for DMP's to be probibited by the new FCA “…That is also why we have chosen to leave on the statute book the enabling powers of the Tribunals, Courts and Enforcement Act 2007. More immediately, we are working with the industry to develop a protocol of best practice for debt management plans, which should cover, among other things, the nature and timing of fees. Indeed, on 14 June the Minister with responsibility for consumer affairs, my hon. Friend the Member for North Norfolk (Norman Lamb), will chair the first industry-wide meeting to discuss and take forward the protocol. That will follow several months of meetings with a smaller, representative group of stakeholders, which has talked through processes, commercial terms and advice, to reach an agreed position.“I also wish to refer the House to new guidance for the debt management sector recently published by the Office of Fair Trading, which sets out in substantial detail the standards expected of firms. I believe that it is appropriate that we give time and focus to current efforts to improve standards in the debt management sector, and take account of the significant changes to the wider regulatory regime enabled by the Bill, before we start talking about changes to a potential statutory scheme….”

 

Hi Nick

 

Thanks for that, interesting.

 

Wonder how 'flipping' will be addressed / looked at?

 

Well, we can discuss and debate the above and other things such as the PPI issue in the other thread you started later, cant we:)

 

Back to the CAB / Wonga thing.....

 

Interesting article from the Medway Messenger (Conservative MP mentioned I believe))

 

http://www.kentonline.co.uk/medway_messenger/news/2012/may/21/debt.aspx

Edited May 23, 2012 by Wintry

[Conniff]

Please note that Nick Pearson is an employee of a debt collection / fee collecting debt management company.

[Space2001]

Please note that Nick Pearson is an employee of a debt collection / fee collecting debt management company.

 

As also discussed here:

 

http://www.consumeractiongroup.co.uk/forum/showthread.php?347735-Guardian-Comment-27.4.2012-Pointless-market-Research-on-PDL-Companies-ACTION-NEEDED!!&highlight=guardian

 

My comment at the time: It is interesting that the first comment under the article supporting the so-called research is from a guy from Paymex. Paymex have a number of companies one of which is Evolution Money who offer Guarantor and secured loans at 63.5%. http://www.evolutionmoney.co.uk/ Oh and they are also a payday loan broker http://www.circleloans.co.uk/payday-loans.asp

[Nick Pearson]

Please note that Nick Pearson is an employee of a debt collection / fee collecting debt management company.

 

Its a debt managment company, Paymex Group (Baines and Ernst being the best known brand). Anyway whats that got to do with the story?

Edited June 1, 2012 by Conniff

[Nick Pearson]

Correct about Evolution offering gurantor and secured loans but we don't offer or broker pay day loans or indeed broker loans or any kind. Circle loans are the broker and they offer evolution loans to their customers as an introducer.

[Conniff]

Its a debt managment company, Paymex Group (Baines and Ernst being the best known brand). Anyway whats that got to do with the story?

 

Just to make contributors aware of who is who and that there would be big fees to add to their misery if you got involved.

 

As also discussed here:

 

And here in more detail. http://www.consumeractiongroup.co.uk/forum/showthread.php?352214-Whose-behind-or-owns-CAG&p=3855010#post3855010

[Space2001]

OK - I just noticed that on Circle Loans website they state:

Circle Loans act as an Introducer to Easycall Finance which is part of the Paymex Limited, Lloyds House, 18-22 Lloyd Street, Manchester M2 5BE. Registered in England & Wales No.: 05823633. Registered Office Address: 8 St John Street Manchester M3 4DU

They only state as being an introducer to Easycall Finance (ie no other firm) which suggests that this is the only company that they introduce to. If this is not the case perhaps you need to get Circle Loans to clarify their website.

 

Regardless, as Coniff suggests, it is useful that everyone is aware who you are - indeed that you work for a debt management firm which advertises 63.5%pa secured loans which is surely a contradiction in itself.

[Nick Pearson]

Hi I've just tried to edit my profile as it appears to other users but although I can edit the changes don't seem to appear. As for the loan APR, it is what it is. Higher the risk, the higher the % rate esp on properties where equity negligible or gurantors less than A1 credit histories themselves.

[Space2001]

Sure, but the purpose of a debt management firm is just that, to manage debt. I have absolutely no reason to believe that your company does not do this professionally and diligently. However, providing loans (particularly at this excessive level) is surely in contradiction to your core business and fosters indebtedness.

[renegadeimp]

You are in it for one reason only. To make money no matter what. Hence the extortionate APR. Notice how no major lians company does the same. truth is you have found a loophole in law that uou and your like have exploited to the fullest.

[sequenci]

You are in it for one reason only. To make money no matter what. Hence the extortionate APR. Notice how no major lians company does the same. truth is you have found a loophole in law that uou and your like have exploited to the fullest.

 

It's not really a 'loophole' though, is it? For a secured loan it's a VERY high APR and a terrible deal and may give rise to an unfair relationships argument unless the loan firm is super dilligent when dealing with the potential customers - which they would have to be anyway given the nature of the lending, i.e. it being secured.

[renegadeimp]

Still know what i mean though. Theyre taking advantage of the extremely vunerable.

[sequenci]

Still know what i mean though. Theyre taking advantage of the extremely vunerable.

 

I know what you mean