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Wonga are winning

You’ve probably seen this in the news today, but if you haven’t, the press release which has come out from Which? about the need to clean up the entire credit market demonstrates that Wonga are definitely winning.

The Which? statement confirms everything that Wonga has been saying pretty well since Day One: that it is often cheaper to get short-term credit through them (and companies like them) than it is to go overdrawn and pay the charges.

That is not to say, as I have discussed in a previous blog, that there aren’t things Wonga ought to do, or should be made to do. But the people who are going after them are playing their hand extremely badly, and are losing as a result.

 

 

Here’s the text of the release:

Which? is today launching a  new campaign to clean up the entire credit market after new Which? research finds that other forms of credit can be as expensive as payday loans.

The payday loans market has rightly attracted criticism for some of the worst practices in the credit market, but our new research finds that in some cases using an authorised and unauthorised overdraft with your bank can be just as expensive. Borrowing £100 for 31 days will cost £30 with a Halifax authorised overdraft or £20 with some Santander accounts, and borrowing the same amount for the same time with a payday loan company costs between £20 and £37.

The research also shows that, similar to rolling over a payday loan, people can rack up sky high default charges if they use an unauthorised overdraft, and be hit with high interest and charges if they stay in their unauthorised overdraft for long periods. With the Halifax Reward current account and the Santander Everyday Account it can cost £100 in charges for going £100 into an unauthorised overdraft for a month.

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