Apparently 45,000 customers of the Wonga payday loans outfit are going to receive a flat £50 as compensation for being conned by fake threatening legal letters from law firms that did not even exist, which went on to include charges for bogus legal fees that is tantamount to fraud that caused huge distress for tens of thousands of Wonga customers, that instead of now facing the full weight of the law has instead been asked to compensate its victims for approx £2.6 million compared to Wonga's annual profits of £84 million which reeks of an FCA regulator that seems even more inept and toothless than the FSA it replaced.

Compensation of £2.6 million across 45,000 victims comes to a little over an average of £57 each for alleged crimes dating back to 2010. If the regulator was upto the job then they should have at least applied the same 5000%+ APR to the compensation amounts that Wonga charges its customers! Never mind the fact that apparently Wonga has not been fined a single penny!

The bottom line is that Wonga has done the crime so should do the time.

1 - Withdraw their licence to operate as a payday lender.

2 - Launch an police criminal investigation.

I have repeatedly warned ALL borrowers to steer clear of payday lender loan sharks.

The Inflation Mega-Trend Ebook (Jan 2010) (FREE DOWNLOAD) - Page 50

Pay Day Loans - During the great recession many pay day loan outfits have sprung up that offer to fill the gap between each pay cheque with near instant small loans of upto £1000 that borrowers are further enticed to roll over into the next pay day. To be blunt, if you are considering these types of loans then you might as well put a gun to your head for all of the distress they will eventually cause you. Whilst the base rate is at 0.5%, pay day loan outfits are charging over 2,000% APR. These types of loans should be illegal in Britain but they are not, which just illustrates how inept the financial regulator is in allowing ordinary citizens to fall victim to 'legal' loan sharks. If the FSA had the best interests of the general public at heart then it would lobby the government to introduce legislation to CAP ALL interest rates at base rate plus 10%. Yes it would mean that the financially illiterate presently taking on extremely high risk loans would usually be denied loans due to the risk / reward factor, but that is how it should be.

The Pay Day loans industry is just further evidence of Britain's bankster run financial system that has been supported by the regulators that have looked the other way so that their colleagues in the financial sector have fleeced the most vulnerable in society of their meager earnings. The financial entities that deliver Pay Day Loan services charging as much as over 5,000% APR are typically subsidiaries of tax payer bailed out banks that refuse to lend at lower rates thus forcing vulnerable customers into the arms of their Pay Day subsidiaries.

There is a reason why the pay day loans industry has been lightly regulated despite all of the harm they do and that is because those involved with them also happen to be big Tory donors!

Tip of the Ice-berg?

It is highly probable that if Wonga has been busy sending out fake legal letters than so will have most of the other payday lenders, which ultimately means many pay day lenders won't survive investigation, especially if the police get involved if justice is to be served.

By Nadeem Walayat

http://www.marketoracle.co.uk

Nadeem Walayat has over 25 years experience of trading derivatives, portfolio management and analysing the financial markets, including one of few who both anticipated and Beat the 1987 Crash. Nadeem's forward looking analysis focuses on UK inflation, economy, interest rates and housing market. He is the author of five ebook's in the The Inflation Mega-Trend and Stocks Stealth Bull Market series that can be downloaded for Free.

Nadeem is the Editor of The Market Oracle, a FREE Daily Financial Markets Analysis & Forecasting online publication that presents in-depth analysis from over 1000 experienced analysts on a range of views of the probable direction of the financial markets, thus enabling our readers to arrive at an informed opinion on future market direction. http://www.marketoracle.co.uk

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any trading losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors before engaging in any trading activities.

Nadeem Walayat Archive

Only logged in users are allowed to post comments. Register/ Log in

The Market Oracle is a FREE Financial Markets Forecasting & Analysis web-site.
(c) 2005-2024 MarketOracle.co.uk (Market Oracle Ltd) - Market Oracle Ltd asserts copyright on all articles authored by our editorial team and all comments posted. Any and all information provided within the web-site, is for general information purposes only and Market Oracle Ltd do not warrant the accuracy, timeliness or suitability of any information provided on this site. nor is or shall be deemed to constitute, financial or any other advice or recommendation by us. and are also not meant to be investment advice or solicitation or recommendation to establish market positions. We do not give investment advice and our comments are an expression of opinion only and should not be construed in any manner whatsoever as recommendations to enter into a market position either stock, option, futures contract, bonds, commodity or any other financial instrument at any time. We recommend that independent professional advice is obtained before you make any investment or trading decisions. By using this site you agree to this sites Terms of Use. From time to time we promote or endorse certain products / services that we believe are worthy of your time and attention. In return for that endorsement and only in the cases where you purchase directly though us may we be compensated by the producers of those products.