Meet the wonga wannabes
Britain cheered when its biggest payday lender went bust last week. But beware its rivals still out there...
WONGA is no more — but there are still dozens of other payday loan firms out there.
And complaints are rocketing. The Financial Ombudsman received nearly 11,000 in the first three months of this year — a 251pc increase compared with the same period last year. At some firms, as many as seven out of ten were upheld in favour of the customer.
Yet cheery advertising campaigns — like the jolly OAP puppets used by Wonga (right) — continue to lure in vulnerable borrowers in need of a short-term loan.
And despite a government crackdown, which saw interest charges capped at double the original loan, fees can be eye-watering.
So who are the Wonga wannabes?
SUNNY LOANS
THE face of Sunny Loans is a fictional surfer called Sonny.
He is a ‘super chilled dude’ who never stresses because ‘he knows that with the right support in his life there is no need to worry’.
Based in Bury St Edmunds, Suffolk, Sunny Loans — the trading name of Elevate Credit International Limited — offers borrowers access to cash in just 15 minutes.
Borrowers can apply for a loan of between £100 and £2,500.
The standard representative APR is 1,293pc, with risky borrowers charged up to 1,617 pc.
At the standard rate, a £1,000 loan taken over three months would cost a total of £1,514 including interest.
Just last month the advertising watchdog banned a series of television adverts for being misleading about interest rates and making exaggerated claims.
Sunny Loans, which launched in 2013, says it does not charge late payment fees and does all it can to help customers when they get into difficulty.
In the last six months of 2017, the Financial Ombudsman received 417 complaints about Elevate Credit International — 56 pc of which were upheld.
Scott Greever, managing director of Elevate Credit, says: ‘On average, our customers are given a £215 loan over 68 days and pay an average of £85 in interest.
‘This demonstrates that “annual” percentage rate (APR) is not an accurate measure of the cost of a loan. We approve only 15 pc of new applicants.’
QUICKQUID
OWNED by parent firm CashEuroNet UK, QuickQuid has been trading since 2007 and offers loans up to £1,000 for new customers — £1,500 to those returning.
Customers may then be offered a top-up if they keep up with their repayments. Its standard representative APR is 1,294 pc.
At this rate it means that if you borrowed £1,000 over three months you would have to pay back £1,720 including interest — almost double the original loan.
QuickQuid asks for repayments of £240 in the first two months and £1,240 in the third month. Interest is applied daily, and as your balance stays higher for longer, you’ll pay more back on this loan than with Sunny Loans, which offers a different repayment plan.
Borrowers who fall into difficulty will be penalised with a £15 late-payment fee — the maximum firms can charge.
During the last six months of 2017, the Financial Ombudsman received 1,509 complaints about CashEuroNet UK, which also trades as Pounds to Pocket, another short-term lender. It ruled in favour of the customer in 72 pc of cases.
A spokesman for CashEuroNet UK says: ‘We are committed to good lending practices and to treating customers fairly, while ensuring that consumers have access to trustworthy and affordable credit.’
PEACHY
WITH its happy-go-lucky bright yellow branding and articles on its website about millennials, Peachy appears to target students and twentysomethings.
It offers loans of between £100 and £1,000 for between one and 12 months.
Based on its representative APR of 947 pc, if you borrow £1,000 over three months you will repay £1,514 in total under its repayment plan.
Borrow the same amount over six months and you’ll pay back £1,870. The rate you pay could be higher if you have a history of missed payments on loans or other bills.
It charges a £15 late fee if you fail to repay your loan in full the day after your repayment date.
Borrowers can extend their loan twice by texting the word ‘extend’ to the lender.
Peachy, a trading name of Cash On Go, is based in Manchester and was founded in 2010.
Customers made 67 complaints to the Financial Ombudsman between July and December last year, 44 pc of which were upheld.
MR LENDER
A CARTOON of a cheery chap in a suit sporting a substantial quiff is the face of Mr Lender.
It offers loans of between £200 and £1,000 over a term of six months.
Its typical APR is 1,256pc and maximum is 1,462 pc. Borrow £1,000 over six months at the standard rate and you would repay a total of £1,815.
The firm says that it charges no late fees. But if you miss a payment it will still damage your credit file.
If you have never borrowed from the lender before it limits you to £500 the first time.
Mr Lender, a trading name of PDL Finance, is based in Loughton, Essex, and was founded in 2008.
The Ombudsman received 38 complaints about Mr Lender between July and December last year, of which 53 pc were upheld.
MYJAR
BASED in Westcliff-on-Sea, Essex, Myjar launched a decade ago and offers loans of between £100 and £7,200 over three, six, 12 or 24 months, with a maximum interest rate of 1,326 pc.
Myjar says it will pay the money straight into your bank account within 15 minutes.
It claims it can offer loans ‘to anyone who has a regular income regardless of their credit score’.
If you borrow £900 over three months, you would be charged £431 in interest — so you would repay a total of £1,332.
You’ll be charged an extra £15 if you are three days late with a payment.
In 2016, the Competition and Markets Authority investigated two companies, Starcom Mediavest and TAN Media, which it found were arranging endorsements for the lender in online articles and blogs without making it clear that these were adverts.
The Ombudsman received 201 complaints about Myjar between July and December last year, and upheld 53 pc in favour of customers. moneymail@dailymail.co.uk