http://www.independent.co.uk/news/uk/crime/fraudsters-use-payday-lender-to-steal-cash-8421131.html

Wonga denied its systems are lax, pointing out that fraud counts for less than 0.01 per cent of its loans. A spokesman said: “Where criminals do get through the net, our fraud team works with victims of identity theft, indemnifying them from costs, plus working with the police wherever possible.”

Of course its not actually in their interests to actually tell us the real ‘cost’…

Anyone been hit by this type of fraud?

double post

Its happened before too

Of course its not actually in their interests to actually tell us the real ‘cost’…

…that smells a bit of “we don’t really care: our profit margin is so fantastic that the money we lose on fraudulent loans is comfortably less than the money we would have to spend on more robust ID/details checking” So what if a few random people they have never met or done “business” with get their bank accounts wrecked for a few days? 👿

They’ve recently launched in South Africa.

Would love to see that risk assessment…

Their risk assessment in SA is great.

In SA the lender can get a Garnishee order against a defaulting lender, which means the lender can go to the persons employee and they have to divert a portion of their salary to repay the debt.

This has of course led to wide scale fraud and most of the garnishee orders have been found to be fraudulently issued. Also, some of them are of amounts way in excess of the amount, or setup so that they can never pay it back so the lender always has a steam of money coming in.

Although Wonga is new in SA and didn’t create this situation, I’m sure the favourable conditions of debt retrieval is attractive.

A friend of a friend used to work for a credit card company with the same idea as wonga; give money to people with none at at extortionate rate. One night in the pub I asked him how he lived with himself (he knew what he was selling was bad) and he said that as long as he got his commission he didn’t care. I’d guess Wonga employees are the same.

give money to people with none at at extortionate rate

Wasn’t this basically the entire economic model for all western economies prior to 2008? I seem to recall there was a bit of a hiccup with the system

I saw that advert on telly last night for personal loans (for people with poor credit ratings) with a one year repayment period and an apr of 278% 😯

The sad reality is that other customers pay for the fraud and defaults.

In simple terms the business model allows for a percentage of fails. You could insure your debt but that would prove expensive and no doubt looked at on an on going basis to see which is the cheapest solution. The margins are fantastic and you only have to look at the advertising spend to appreciate that. However all that profit is built on the exploitation and misery of the poorest in our community.

1688% APR is the highest i’ve seen advertised.

Whatever government is in power the essentials are the same.

They smile when they lie and it’s always the poorest who don’t have a voice and will get bent over and royally shafted.

Nice info Shred, are you down there, from there or just horribly (disturbingly) familiar with SA debt recovery arrangements?

I would be expecting the more creative members of the community to “make a plan” as seems rather common.

Payday loans are big business here in BW with lenders charging >15% per month last time I looked. They used to take your ID card, bank card and PIN number as security: last week of the month there would be queues of loan company employees drawing cash from the lendees’ accounts… thankfully this practice has been legislated against.

I seem to recall there was a bit of a hiccup with the system

Not at all, as far as I can see the Billionaires are doing just great and the banks got handed billions to boot…

Oh, you mean for the little people – they don’t mind, after all they were born to suffer….

I’m originally from there, and really just keep up on the news.

The unrest at the Marikana mines which resulted in the shooting of the workers by the police brought some of this to light. A large number of the mine workers had reduced salaries due to these garnishee orders which could have contributed to the unrest.

The joys of life in Bullingdon Britain!

Probably coincidence but two of the ads on this page are for Wonga.

Not co-incidence – Google doing its stuff.

Anyone been hit by this type of fraud?

Yes twice this year within the space of two weeks. 👿

The fist time it happened the bank simply refunded the money, they didn’t cancel my card and two weeks later the fraudsters helped themselves again. In spite of several calls and a signed declarations from me I’m still owed money because the bank(Halifax)are still refuting a number of the loans.

The Halifax are complete and utter idiots, had they closed my account on the first occasion they wouldn’t have had the opportunity the second time around, I’m still waiting for an answer as to why they didn’t do this?

I was actually sent an unsigned credit agreement by the Halifax as proof that I had took out one of the loans LOL, proof if any where needed that these loans are getting thrown out to anyone!

In fairness Wonga wasn’t one of the companies involved however all fraudulent transactions(there where many)where payday loan related!

I strongly suspect this type of fraud is rife and the banks are doing everything possible to hush it up.