Wonga Ads During Kids Tv

[mikey4444]

I think that companies like Wonga are nothing better than loan sharks, with their ludicrously high interest rates. But why would they want to run TV adverts during childrens TV programs ? Their adverts are childish but that doesn't seem to fully explain the situation.

Have Ed and Martin Lewis got a point here ?

http://www.bbc.co.uk/news/uk-politics-24886804

[jno]

FredPuli, bankers are the people who mismanage banks so much that I have to take them over. Their only punishment is that sometimes they lose their knighthoods.

[hc4361]

An unarranged overdraft on a Santander current account costs £5 a day. The £100 for 14 days example I gave above would cost £70, compared to £20.27 from Wonga.
The arranged overdraft fee at Santander is £1 a day, costing £14.
Add on the fees for bouncing payments (up to £25 each) and you can see that Wonga really isn't so bad.

[ichkeria]

As someone somewhere else said, that question is like Mrs Merton's:

"What first attracted you to the millionaire Paul Daniels?"

:-)

[sp1814]

Just want to toss a hand grenade into this thread...

The APR that these companies charge is completely fair, and financially sound.

These are supposed to be very short term loans, and as such the APR you see on screen is not representative of what borrowers pay.

If i leant you £10 today and asked you to pay me back £11 to tomorrow, the APR on that loan would be 365%.

That's why when someone takes out a load for £100 over four weeks, and pays back £150, the APR runs into the thousands.

The charges are publicised up front.

As to whether these companies should be allowed to advertise during childrens' tv - no I don't think the should, however, the concept of childrens' tv is difficult to judge now because of the way we watch telly. If mum and dad tape The X Factor and their kids watch it at 10am on Sunday morning, those ads will be buried in there. Same as any other programme aired before the watershed.

[tamborine]

Using kids in loan adverts, as in MA, is detestable as are the smart kids.

[weecalf]

Ed and his mob are part of the reason that people need to go to wonga and the like .we don't all get thousands for pointing out the obvious .

[New Judge]

Much of the ground has already been covered by hc and sp, but to elaborate a bit: if you borrow £100 from Wonga for a week they charge you twelve quid. Is this excessive? If you were able to borrow the same sum from a bank at credit card rates (around 20% AER) it would cost you about 40p. Is it realistic for a company to lend somebody whom they know nothing about £100 and get a few pence for their trouble? Even if the rate was 100%AER the loan would still cost less than £2. People should get real when considering charges made by payday loan companies. It is not appropriate to compare their rates with more conventional forms of lending by using AER for very short term loans and £12 or so to borrow £100 for a week is by no means excessive. Their market is completely different to that of conventional banks, their short term low value loans cannot possibly be made at normal bank rates which, if applicable, would not even come near to cover the administrative costs of the transaction.

“They are essentially unscrupulous and crooked..”

I don’t see anything unscrupulous in their actions, Mikey. People obviously need their services (and the reasons for this are manifold and not of the loan companies’ making). They cannot be described as crooked. Their charges are made absolutely clear from the outset (which is more than can be said for many conventional banking products).

So why do they advertise when children’s programmes are being screened? Companies pay for advertising which they think will bring them the greatest return. Why don’t the government curtail their activities? Because they are legal, transparent, popular and serve a need. There are all sorts of things which people find unpalatable but that does not mean the government should legislate to ban them.

[FredPuli43]

Trouble is NJ, that borrowing for these periods is no substitute for thrift and a modest bit of financial planning, and these companies encourage it. That may not be a good thing

[pixie373]

I'm not sure providing a service necessarily means encouraging it, Fred. Nobody has to use them. In my opinion, if you can afford a payday loan- you don't need one- you need to plan better.

[New Judge]

Couldn't agree more Fred.

Unfortunately if the likes of Wonga & Co did not exist their customers would still be in similar financial distress. Their predicament is not caused or exacerbated by payday lenders but only alleviated by them (if only temporarily). They certainly serve a need and, as has been pointed out, distasteful as some might find their business model, their methods of debt recovery do not usually involve broken limbs.