Should Wonga be banned from advertising to protect TV audiences?
If one thing has been shown in the last week, the ASA’s principle values of ‘legal, decent & honest’ doesn’t fit within Wonga’s moral code.
News that Wonga will have to pay £2.6m compensation over debt collection is a sign that at last this organisation is finally being tamed. It has agreed to compensate tens of thousands of customers because it sent them letters from fake law firms demanding they repay their debts.
Even though it’s paying out ‘a pocket money sum” (it made £62.5m profits after tax last year) it has managed to get away with breaking the law by impersonating a solicitor, well two in fact. The reason is because the incident happened before the Financial Conduct Authority started overseeing the financial sector, the former regulator was The Office of Fair Trading. A case file has been given to the City of London Police, but it seems the police aren’t going to investigate it further, so Wonga gets away with it, sending a message to others that the law and the FCA have no teeth.
As many of us expected, they behave little better than “loan sharks” as some charities and religious groups have referred to them as. The Unite Union called what they do”vulture capitalism”.
If we want to maintain, as an industry, the ability to self regulate I think we should block brands like Wonga (and the rest) from advertising and show consumers, politicians and the press that we are prepared to take action to protect the consumer, that we have both backbone and teeth. The FCA and police certainly don’t.
Of course the Financial Directors of the big broadcast media owners probably won’t see why they should decline their money, but as with most FDs, their moral compass is rarely aligned with the man in the street. Or with the many charities and church groups that have for a long time commented on the likes of Wonga having a detrimental effect upon the poorer members of society, driving them further into debt.
I’m not religious but religion is responsible for many of our laws and moral behaviour in society, most of us will recall from our school days the story of Jesus chasing the money lenders away from the church. In fact most religions forbid money lending at a profit, including Christians, not just Islam.
While Wonga’s PR department may defend their position as ‘filling a gap left by banks, unwilling to loan to ordinary people’, or that most people pay back without incurring their extraordinary interest rates, the facts that have come out about their immoral unethical behaviour has shown the brand’s true dark colours.
No one can deny that Wonga is a branding success, packaged to look friendly, honest and they even put the term “pay day loans” into our vocabulary to make it all sound like a service to ordinary people needing a few quid before pay day.
Their ads, if a little odd (I’m not sure why they picked a series of pensioners done in a Thunderbird puppet style) certainly softened the loan shark image.
Wonga’s unethical behaviour think this can be dismissed by claiming “a misunderstanding” or “system errors’ and all is forgiven by saying sorry. Tim Weller (CEO) said “This is not the proudest day in Wonga’s history… we have learnt lessons from this and are changing as a business.” Really? Then consider that in 2012 they sent letters to customers wrongly claiming they might have “committed fraud” by missing repayments and said sorry then too.
At least one organisation has the backbone to stand up, Richard Lloyd, of the consumer group Which? condemning Wonga said, “lending does not get much more irresponsible than this. It’s a shocking new low for the payday industry that is already dogged by bad practice and Wonga deserves to have the book thrown at it.”
So should we ban them from advertising? Add your comment below.