Wonga News Update: Profit Increase Calms Fears

Wonga pretax profits calm fears

Wonga News Update: Following the problems encountered between the money lending website and the church, Wonga have dismissed concerns due to profit increase.

After the money lending website encountered serious problems with the Church earlier this year after it was revealed that some of the Chruch’s investment opportunities had redistributed the money into Wonga; a company with whom they were morally opposed.

In 2012, Wonga’s pre-tax profits reached an understandably impressive £84.5million as they catered to those who struggled through the year needing more money than their wages could offer them. While it is a logical solution to a short-term cash-flow problems it is far from an ideal way to supplement incomes. This is largely due to the sky-high interest rates that are connected to each of the short term loans that are distributed. This is also the reason the Church felt morally uncomfortable about their money being indirectly invested in the firm.

The high interest rates have forced extensive scrutiny to be put on the loans company because they have been known to register annual interest rates of 5853, which perversely leave the borrowers financially stricken.

Wonga News Update

Politicians too have voiced their concerns over the company and their excessive interest rates, but the company have faced little resistance from their prospective clients as they increased the amount available for lending by a staggering 68% up to £1.2bn and in response, their net profit shot up 36% to £62.5m.

In addition to an increase in their lending capacity, Wonga have also expanded overseas to double its customer base and increase the loan default rate by 0.7%.

Wonga have expressed a desire to expand their services further still to include online payments and small business loans. They have the ambition to continue expanding to perhaps become less firmly fixed in the land of the morally questionable.

The Church’s ambitions to beat the loan company out of business by establishing non-profit lending companies that will outbid the rivals.

The Office of Fair Trading organised an investigation last year and discovered that payday lenders were not fulfilling their fairness obligations and were not conducting affordability checks – this investigation has forced nearly 50% of the companies found guilty of this out of the market. This was the preferable choice to changing their standards and offering these quality checks; a move that is indicative of the market’s integrity.

For more information on Wonga and the services offered by the online lending firm, follow this link http://www.customerservicescontact.co.uk/wonga-telephone-number/ and speak with a member of their customer services department.

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