To hope that the CofE can kill off Wonga, but think they might struggle?

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I would love to see an end to Wonga, but we already have credit unions, I dont know how we can change the culture.

IIRC, with our credit union, you have to save first, then you can borrow. Maybe that is what is putting people off.

Of course the Church is not going to lend people money, just allow credit unions to use their premises (not just churches) and encourage church members to volunteer skills and advice. Also credit unions benefit from having a broad range of members - not just people with bad credit ratings - and this is how they work in places like Ireland. Well done ArchBish; the first really useful thing the Church has suggested in decades.

Welby cannot ban anything
and the CofE will not get a banking licence - even though the Archbishop has a personal one

what they WILL do is make it really, really easy to access Credit Unions and the CAB on Church premises
to make life hard for Wonga and co

GOOD

those footballers aren't all bad

Well done Cisse. You had to give in in the end, but it was nice while it lasted.

The Credit Union s in Ireland also have a good relationship with local schools, sponsorships for competitions etc, running art exhibitions of pupils work. They run a school savings scheme too which is excellent. Dh and I save for the dc obviously, but they also have credit union accounts, where the money can be collected each weds in school. Some weeks, the ds who are, 7, 9 and 11 might put in just £1 other times its more. But they have all a good understanding now of what it means to save and they know what interest is! I often hear them say, I'll spend a bit of that £5 granny gave me and put the rest in the cu. i know they could just use a money box and a bank but it saves me having to be organised & from bringing a bag of coppers to the bank.

"Wonga have the lowest default rate in the industry, you know. It's a very solid business model that the CofE can well afford to copy."

Please tell more? (interested)

Credit Unions are the way to go, imo. Great to see the Church leading the way, but sad local Councils didn't get there first.

Of Course Wonga have a low default rate.
They never write a loan off, they just roll it into the next one and keep chasing for daily installments

''Also. If you cant pay wonga back, they will keep trying every day to take money off your debit card as soon as money goes into your account. They dont care if they leave you with nothing.''

Yeah, they really misuse continuous payment authority, and banks collude by falsely telling their customers that they can only cancel these agreements directly with the payday lender. Complete bollocks of course, you can tell you bank to refuse payment requests. Vested interest I wonder. If payday loans are bleeding your account dry, it's almost a dead cert that you'll get an unauthorised overdraft and bounced direct debits. Then they can charge you for this thus sending you further in to the debt spiral.

www.thisismoney.co.uk/money/cardsloans/article-2292044/Wonga-leaves-dozens-victims-answers-raids-bank-accounts-30-000-recover-loans-fraudsters.html

There is a woman in that article, wonga raided her bank account 13 times in 2 days and took £5000 in total. They should not be allowed to do this. She hadn't even taken the loan out, she was a victim of fraud.

on a lighter note, Wonga are stepping up the trade war here: www.newsthump.com/2013/07/25/wonga-com-retaliates-by-unveiling-believable-religion/

Sorry, but I have used Wonga in the past and they were great - they saved the day. I have a good, regular income but I live from month to month (no savings after a bad divorce) and bad credit rating after divorce meant finance problems so no bank is going to lend me money.

When the bills come in before my salary does, what else do I do? I know I have the money, it's just the bills have come first...so Wonga steps in. I felt like they had faith in me where no other institution did, and if they take a cut for helping, isn't that reasonable? They have to make a living too. I have always paid off early and never defaulted. More than the Church of England has done for me - are they going to help out then? Hardly think so. I feel like writing personally to tell the Archbishop so...

thebody Please don't suggest selling Lambeth Palace. Our LO grandparents will move there soon.

Maybe he who is without sin should cast the first stone: www.bbc.co.uk/news/business-23459932

Ooops

Wonga will not be going anyway fast:

Another person benefiting from Wonga.com?s success is venture capitalist Adrian Beecroft, a major donor to the Tory party, having handed over £593,000 since David Cameron became leader. Mr Beecroft is chairman of Dawn Capital, which has a large stock in Wonga Group. Latest accounts show the company, which is now worth £384m, was worth a mere £17m in December 2010.

I don't know about anyone else, but I'm a bit at all the people rushing to the defense of the payday loan companies and the named one in particular. Really?

This story isn't about denying people in temporary (or perpetual) money problems short term loans, its about offering an alternative without terrible interest and terms and conditions like CPAs. What's not to like? Fair enough, be sceptical whether they will appeal to people or be sufficient, but its hardly "nanny state" or even "nanny church" to offer a less exploitative option. If it works as the church/credit unions want it to, then they will out compete the PLCs - sounds very fair and capitalistic if you are into that kind of thing.

I'm finding it difficult to think of a scenario where resorting to payday loans would ever be preferible to a small loan from a credit union, if access to the latter could be improved.

If you could afford the payday loan, then surely its better to get it at more advantageous rates and terms? And if you are either borderline able to afford it or not able then surely it would be better to go to people who will help you to work out what you can afford, help you manage your money by encouraging you to save and direct you to sources of free, independent money advice if you are struggling - as opposed to going to people who will encourage you to borrow money at high interest rates and be pursued for it through continuous payment authorities, etc. People who want you to make them as much money as possible.

There is also the problem that advertising such freely available credit, will encourage people to take out loans they don't really need, for things they don't really need, to act impulsively to buy things which aren't really essential. I really doubt that all the people who take out payday loans would otherwise have gone to loan sharks. My friend, who got married this month, took one out to pay for little bits and pieces for the wedding. I am certain that if pay day loans weren't available, she either would have done without these things, planned and budgetted for these things earlier, or borrowed from her parents who were funding other aspects of the wedding.

I was worried about her when she told me, as I hadn't realised things were so tight. So, she's got to find that £500 that she couldn't find this month, and £70 on top of that to pay for the privelage of spending the money a few weeks before she had the money too.

Goodness knows what the long term affects of these little extras will be.

I realise other people borrow the money for essentials such as car repairs, bills etc, but surely that suggests they are even less able to afford it.

Wonga do roll, which skews the figures, but they also refuse more applicants than other payday loan companies. They refuse the most desperate people...

I worked as a volunteer credit officer for a credit union and it helped a lot of people. Sadly it collapsed as too many people did not pay back their loans when the financial crisis hit and people lost their jobs. A few other credit unions failed after the financial crisis. I think Justine Welby is right to talk about this but I wonder in reality how viable a church credit union would be?

In my experience, many people on benefits came in and asked for loans after months of being charged unauthorised overdraft fees by banks. Truth was many were in debt only because of a bit of bad luck and spiralling bank charges.

PDL often advertise they are cheaper than getting an unauthorised overdraft - that is true.

Perhaps Justin Welby might also need to talk about unfair bank charges.

I agree with him, although as others have said I'm not sure how viable the whole idea is.

Something else that could be targeted is the fact that people with those top-up cards pay twice as much for their energy as the rest of us. That's just purely picking on poor people, surely? The idea of pay-as-you-go energy is not in itself a bad idea as it could help people budget (please correct me if I am wrong on this) but why is the rate so much higher?

I think it's right for the church to speak out on such issues.

Wonga are a company who prey on the stupidity of people who are financially inept in the same way that bookmakers prey on the stupidity of gamblers.

If you say that some people need a short term loan in an emergency, that argument doesn't hold water.....it will still have to be paid back, plus the ridiculous interest rate. The maximum loan is only £1k so anyone with any brains would save a few quid each week to put by for any emergencies.

There are a lot of thick and irresponsible people out there who live beyond their means. Come on, they crack on they're skint but have an arm full of tattoos, smoke, drink, then get a pay day loan out to pay for their Sky and broadband package.

Wongas business model assumes a 50% default rate ( according to radio 4). The default is then rolled over and recovered later - as others have said, as the first call on an credit funds thereafter. The model perpetuates the borrowers' misery and despair.

I actually cheered out loud when I heard what the archbishop had said - this single statement shows how relevant he wants to make the church during his term of office. If his initiative can save even a few families from these financial traps, it will be a good days work.

The church has actually invested in a company that has invested in Wonga. Oooops

Church in Hypocrisy Shocker

And one of its major investors is also a major Conservative party donor (£500,000+).