The UK’s largest and best known payday lender, Wonga, has unveiled its new advertising campaign as it seeks to establish a new image.
The new television adverts focus on hard-working people. Gone are the elderly puppet characters that symbolised the firm in the past – instead the adverts suggest Wonga loans can help people carrying out jobs such as farmer, HGV driver or dinner lady. Its new slogan is ‘credit for the real world’.
The adverts will not be shown during children’s programmes, or at any other time likely to attract a large younger audience. For example, no adverts will be shown at any time on the MTV channel.
The firm is looking at introducing a number of other lending products, including longer-term loans and credit cards, and may use a different brand name when these are launched.
Wonga has also introduced a number of new features on its loans, which include:
• The ability to pay back the loan balance, without interest or fees, within 24 hours should a customer change their mind about taking out the loan
• A grace period on late repayments, whereby the £15 late payment fee will only be applied if the payment is made more than three days after it was due
• Arrears will only accrue interest for seven days, rather than the 30 days which was previously the case
Wonga’s loans are also cheaper now than in the past. The price cap came into force in January 2015, and the firm now charges an Annual Percentage Rate of 1,509%, compared to the previous rate of 5,853%.
The firm announced a pre-tax loss of £37.3 million in 2014.
Wonga chief executive Tara Kneafsey said:
“Our new product features and today’s marketing relaunch are further proof of the action we’ve taken, and continue to take, to ensure Wonga is lending responsibly and putting customer outcomes first.
“We’re re-presenting our short-term loans to the public in a way that accesses the right type of customer and reduces the risk of inadvertently attracting the very young or vulnerable.
“Our focus is on serving hard-working people throughout the UK who need access to transparent, flexible and short-term credit products.”
Wonga has already fallen foul of the Financial Conduct Authority (FCA) on two occasions. Since the FCA took over as consumer credit regulator on April 1 2014, Wonga has been forced to issue compensation payments totalling £2.6 million to customers who received debt collection letters from fake law firms, and to write off £220 million worth of loans that would not have been granted under new affordability criteria.
Payday lenders can continue to expect close scrutiny from the FCA.
The information shown in this article was correct at the time of publication. Articles are not routinely reviewed and as such are not updated. Please be aware the facts, circumstances or legal position may change after publication of the article.