Wonga and moral hazard? : Fri Oct 03, 2014 12:17 pm  

The story of Wonga is full of moral posers. Firstly, the very idea of it stunk. Now the regulators response stinks. Writing off debt more than 30 days in arrears is bizarre - those people who struggled to repay their loans suffer relatively. The idea that a borrower should have no personal responsibility is morally unsound (what do you reckon Standee!?). In effect the regulator is saying all borrowers in arrears are idiots - again that can't be right? It is clear the regulator (rightly in my view) wants to make an example of Wonga and sort out a sick industry but surely there is a better way?

Re: Wonga and moral hazard? : Fri Oct 03, 2014 12:51 pm  

Given that you agree that the money lenders who disregard any previously agreed standards on lending and given that you agree that having large numbers of citizens in deep trouble with their finances BECAUSE of irresponsible lending ( even £500 owed is deep trouble if you have little or no disposable nett income), then all you have to do then is agree what the form of recompense should be.

1. Fine the business £220 million and put the money in the treasury leaving behind 330,000 citizens who still can't keep up the repayments on their loans.

2. Write off the loans and draw a line underneath the whole sordid business.

Option 2 solves both issues, it penalises the business and sorts out the mess with their clients, given that Wonga have agreed to do this then its fairly obvious that they also agree that they acted irresponsibly and went against any of the financial industry guidelines to checking on potential clients ability to repay, its also obvious that they had a policy not to really care about the ability to repay as part of their business model was to make additional top-up loans to people who already couldn't pay the original one - they were not stupid and they knew exactly what they were doing, their route to outstanding profits was to entrap clients into cycles of borrowing in the same way that doorstep lending sharks do and even bunging donations to a political party couldn't whitewash the fact that their business model was immoral and preyed on those who would not question what they were signing.

Re: Wonga and moral hazard? : Fri Oct 03, 2014 2:11 pm  

it stinks, nobody forced anyone to borrow, it's down to the customer to borrow, NO PERSONAL RESPONSIBILITY.

but it's OK, vote Labour, and they will give you more and tax me more, we're all winners, eh?

Re: Wonga and moral hazard? : Fri Oct 03, 2014 5:33 pm  

Standee wrote:

it stinks, nobody forced anyone to borrow, it's down to the customer to borrow, NO PERSONAL RESPONSIBILITY.

but it's OK, vote Labour, and they will give you more and tax me more, we're all winners, eh?

Don't cry for Wonga, they made plenty out of the people they loaned to, the ones they are writing off in all probability do not represent a total asset write off to them, simply ridding themselves of an overhead in debt collecting - if you've loaned out £100 and taken just four weeks worth of payments on it then you've already charged £38 in interest and charges, at that point if the loan is not repaid then you roll it over on different terms to the original and you really start to cream it - you can see that within a few short months you're making serious money.

They have had their hand forced but have no doubt that it will be on their terms, it always is.

Re: Wonga and moral hazard? : Fri Oct 03, 2014 5:39 pm  

JerryChicken wrote:

Don't cry for Wonga, they made plenty out of the people they loaned to, the ones they are writing off in all probability do not represent a total asset write off to them, simply ridding themselves of an overhead in debt collecting - if you've loaned out £100 and taken just four weeks worth of payments on it then you've already charged £38 in interest and charges, at that point if the loan is not repaid then you roll it over on different terms to the original and you really start to cream it - you can see that within a few short months you're making serious money.

They have had their hand forced but have no doubt that it will be on their terms, it always is.

THEN DO NOT BORROW/SPEND WHAT YOU HAVEN'T GOT

it's quite simple

maybe we should just have shot everyone with over 30 days arrears, probably not paying tax and sponging from the welfare state, two birds, one stone.

Re: Wonga and moral hazard? : Fri Oct 03, 2014 5:45 pm  

Standee wrote:

THEN DO NOT BORROW/SPEND WHAT YOU HAVEN'T GOT

it's quite simple

maybe we should just have shot everyone with over 30 days arrears, probably not paying tax and sponging from the welfare state, two birds, one stone.

You really haven't a clue about economics, the capitalist system and money as your posts often show.

However at least you display your ignorance in public, which is more than most who haven't a clue about how the system fails them but think it rewards them.

Re: Wonga and moral hazard? : Fri Oct 03, 2014 5:54 pm  

Standee wrote:

THEN DO NOT BORROW/SPEND WHAT YOU HAVEN'T GOT

it's quite simple

maybe we should just have shot everyone with over 30 days arrears, probably not paying tax and sponging from the welfare state, two birds, one stone.

Why would you borrow when you can already afford it?

Re: Wonga and moral hazard? : Fri Oct 03, 2014 7:33 pm  

Standee wrote:

it stinks, nobody forced anyone to borrow, it's down to the customer to borrow, NO PERSONAL RESPONSIBILITY.

but it's OK, vote Labour, and they will give you more and tax me more, we're all winners, eh?

Spot on Standee.

Re: Wonga and moral hazard? : Sat Oct 04, 2014 7:39 am  

Leaguefan wrote:

I really haven't a clue.

I agree, you have no clue, just deep jealousy and a bitter desire that your life was different.

Re: Wonga and moral hazard? : Sat Oct 04, 2014 7:56 am  

Standee wrote:

I agree, you have no clue, just deep jealousy and a bitter desire that your life was different.

My point is well proven by your answer.

Please do tell me :

a) Of what/whom am I jealous?

b) What do I desire that would make my life different?