RIP to the puppet-fronted lender of yore: Wonga has unveiled a sober new look (but stuck with the wronga-rhyming name) in its latest move to get back on the right side of popular opinion while persuading the Financial Conduct Authority to let it stay in business.
The new, softly-lit TV adverts are populated not by caricatured old people, but by ordinary folk – a dinner lady, a football pitch painter, a farmer and, of course, a mother. The ‘credit for the real world’ campaign is clearly targeted at Middle England, rather than those at the very bottom of the pile really struggling to make ends meet.
The payday lender also said it was working to make sure its ads didn’t appear on TV stations likely to attract under-18 viewers (give most stream shows online, that shouldn’t be a problem), while slapping on ‘clear risk warnings and representative APRs, which go beyond current regulatory requirements’.
‘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,’ UK chief exec Tara Kneafsey said.
Chairman Andy Haste, formerly of RSA like Kneafsey, has been doing his darndest to throw out the kitchen sink since he came on board last July, admitting the business will be ‘smaller and less profitable’. It lost £37m in 2014, from writing off £220m of debt, £2.6m compensation to 45,000 customers for sending fake legal scare letters and losing 42% of its customers, both through bad press and tightening up its lending criteria.
It also announced more changes to its 1,508% APR payday loans, including a three-day grace period for late repayment and a 24-hour cooling off period for customers to cancel. Meanwhile, it’s looking into other products: longer-term loans, credit cards and the like.
This fuzzy feel and new safety measures could well attract people who had been put off by Wonga’s dodgy reputation. But, with the changes, the payday lender has a more important stakeholder in its sights: the FCA. Along with its competitors, it’s currently operating on an interim licence while the regulator decides the fate of the industry, in a review due to last into next year.
Wonga has, perhaps unfairly given others’ equally unsavoury practices, been the whipping boy for payday lenders. But given the seemingly huge efforts it’s making to clean up its act, it’s the most likely to survive any FCA cull – and with that sweep a whole lot more customers (the credit-worthy ones anyway).