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Which? campaign to ‘clean up credit’
Once you get past the headline-grabbing APR that dominates most discussions surrounding Wonga, the reality is that our customers pay nothing like the thousands of per cent interest that some still believe we charge.
Our regular customer surveys continue to show that most people use Wonga because of the control, convenience and transparency of the service, but the recent Which? campaign to “clean up the entire credit market” also backs up the other rarely told truth about our consumer product:
People often use Wonga because of the price.
The Which? research highlights borrowing £100 for a month can cost up to £30 with an authorised bank overdraft, or up to £100 with an unauthorised overdraft.
With Wonga, our customers generally use our service for an even shorter period of time (17 days, costing £23.44 for a £100 loan) but even if borrowed over a month Which? showed that we are still cheaper than nine of the 10 unauthorised overdrafts from the banks.
We fully support the Which? call for transparency of charges, consumer control and a crackdown on irresponsible lending, and strongly believe that total cost of credit (TCC) remains the most useful measure for consumers when comparing the cost of short-term credit - which is why we clearly show the TCC on our homepage.
As we have commented many times, Wonga is not the only solution for every credit need. But the importance of a competitive marketplace with multiple product options for the consumer, with clearly signposted fees and charges, is the only way people will have the choice and clarity on deciding what product is best for their individual circumstances.
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