Wonga are writing off £220 million pounds worth of debt for 330,000 customers, who they realised actually couldn't afford their payday loans in the first place. Earlier in the year Justin Welby declared a war on Wonga, and the C of E launched a new scheme to take on the payday lenders, the Church Credit Champions Network. "The Church of England is the best branch network in the country," he said. "A major high street bank has at most 3000 branches, but the Church of England has 16,000! The purpose of the Champions Network is to harness that unparalleled presence in the community. The goal is both to help those afflicted by financial problems and equip us all to save and borrow in a responsible way."
You may think they were irresponsible loaning money to people who clearly weren't in a position to pay it back, but a certain amount of responsibility must also lie with the borrower.
Being in debt is a horrible, sad, frustrating place to be. You feel elated when you are able to cover a bill, but guilty when you treat yourself to something that isn't essential. The generation before us were an 'if you can't afford it, you can't have it' generation. My generation have been fed a diet of credit cards, loans and store cards, and don't worry if you can't pay those off, here's a payday loan to tide you over.....that just grows and grows and grows.
Hopefully now it is turning around again and the next generation will be more frugal with their finances. I always wished that back in the early years of our marriage, someone would have taken the time to educate myself and my husband a bit more about credit cards etc...although our spending was firmly our responsibility, I do feel we were a bit blind about some of the debts we built up.
Nowadays, you have the likes of Martin Lewis doing an excellent job of guiding the nation through the highs and lows of every financial situation you could possibly imagine. There are also a number of charities who are steering people towards living debt free such as CAP and StepChange who offer free advice; I still think more could be done to educate our young adults at school and at home though.
I am determined not to let our children share our experience, so much so, that our eldest daughter who is in full time work and can afford to buy pretty much what she wants, says I have ruined shopping for her because she's too scared to spend her money! Imagine that, a world where a 19 year old girl doesn't buy a new pair of shoes or a different shade of lipstick each week. That's kind of gone a bit too far the other way, but at least she'll be able to move out sooner..........won't she?.......Please?
Have Wonga done the right thing? I think so, but I really hope that those customers who have found their debt cleared do not end up repeating their mistakes and borrow what they can't afford again, I pray that this can be a fresh start for them.