Wonga jump into lower cost loans before being pushed
Britain's biggest payday loan lenders have started to randomly pick out people and offering them loands that have noticeably better terms than other payday loans companies. By the time the Financial Conduct Authority's new rules take effect in the New Year, Wonga will be able to brag: 'Oh that? We were doing all that anyway. We don't need telling because we're nice. Honestly we are.'
Of course, there's a lot of people who couldn't care whether Wonga are nice or not and look at them like any other financial institution and you're a mug if you get involved with them and deserve everything that comes with it. Hardly an empathetic approach, but then, Britain isn't an empathetic place really.
Anyway, the FCA rules say that payday loans will have to cap their interest at 0.8% per day, which means that, if you're borrowing £100, the customer will only accrue a maximum level of interest of 80p per day. Fixed default fees will be restricted to £15 and there'll be a cost cap of 100% of the initial loan.
Of course, Wonga deserve scrutiny as they've been sending customers letters from fake legal firms and have had a number of commercials banned and had to write off £220m in loans after the FCA spanked them on the way they do things.
It seems to be the way payday loans are going. Last week, we told you about Mr Lender - a dismal name for a company - who are aiming to become the trustworthy, cheerful face of finance.
The FCA will be reviewing the new measures in 2017 to see if they're working and protecting the customers. Full marks if you muttered "we'll see" under your breath throughout this whole article.