The Anonymous Widower

Wonga Gets Its Calculations Wrong

I have just reread Some Financial Ramblings About Wonga, which I wrote in 2012.

This was a paragraph.

So this all makes me think that at some time, Wonga will be unable to sustain the current growth. Especially, if legislation to limit their interest rates of over two thousand percent was passed by parliament

The legislation didn’t happen, but publicity around a 2,000 percent interest rate didn’t help.

I used to part-own a finance .company and know from personal experience, that with such a company cash-flow is very easy to predict to the penny.

So when Wonga lost its sheen a few years ago, I suspect that the owners should have seen the writing on the wall.

Mathematics doesn’t lie!

But they didn’t and only last week, a group of mugs poured £10million on the fire.

 

August 31, 2018 - Posted by | Finance |

2 Comments »

  1. Another £10M into the pit is perhaps more accurate.

    Initially vulnerable borrowers didn’t notice the usurious interest rates hidden in the small print at the bottom of their ads, but news of it and its disastrous bankrupting consequences if repayments were missed soon spread, and I suspect that after a while the only customers left were those who had little if any intention of repaying their loans.

    Sending out letters from fake lawyers was also extremely stupid. Leaving aside the dubious legality, it told their debtors that they were merely bluffing and their threats of legal action etc. could be ignored.

    Comment by Mark Clayton | August 31, 2018 | Reply

    • All that would have shown up in their calculations years ago. They could have used all that publicity to turn the company into a responsible lender. I suspect there’s a lender of last resort out there with good principles. But they keep it quiet and let the customers do their publicity. Zopa who lend to people with good ratings, don’t exactly blow their own trumpet.

      Comment by AnonW | August 31, 2018 | Reply


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