‘Predatory’ lender draws back on high-interest Wonga loans to students

0
Have your say

Short-term lender Wonga.com is taking down information on student finances from its website following accusations it was encouraging undergraduates to take out high-interest loans.

The National Union of Students branded the firm “highly irresponsible” for carrying what it called “predatory marketing” and had called on the company to withdraw it immediately.

In a statement last night, Wonga said it was taking the information down because it does “not actively target students as potential customers and we wanted to clear up any confusion”.

The website had contained a section on student loans in which it said: “A student loan is fine to help you pay for your university and living costs, but what about those times when you’re waiting on money to come in and you need to buy or pay for something unexpected now?

“There’s a totally new way of borrowing money to see you through until your next cheque and it’s called Wonga.”

It added: “Student loans are usually far cheaper than your standard personal loan. But there can be a downside – you potentially end up borrowing more than you need, while a nasty debt accumulates for your graduation that could take years to repay.

“With a Wonga loan the interest rate is much higher, but you only borrow it for a month and pay the loan back on a date that suits. For those occasional emergencies or unexpected events, it means you can carry on with life without a long-term debt that keeps accumulating.”

Wonga said it listened to customers and public opinion and it was clear the old article gave rise to misunderstandings.

“We would like to clarify that Wonga does not target students. Yet we do not discriminate against working, adult students who may choose to apply either.”

The firm had also been criticised by education charity the Helena Kennedy Foundation. Its chief executive Wes Streeting said it was clear “legal loan sharks” like Wonga were moving in for the kill as universities cut funding.