Does Wonga really deserve another chance?

Owners must have been aghast at the storm of protest over news that Wonga had been sending vulnerable borrowers threatening letters from bogus lawyers

Wonga’s owners are a mixture of private-equity investors who are banking on being able to turn their considerable investment in the firm into a decent profit. As such, they plan to take the high-cost-credit company to the stock market when the time is right, and by that I mean when they can turn the most profit.

They’ve told me in the past that they have no particular time frame in mind. While the business has been growing exponentially as more hard-up people turn to short-term credit to get by, they’ve been able to sit back and anticipate a more-than-decent return in due course.

Yet alarm bells must have been ringing as the City watchdog introduced tough new rules that cut the amount of profit the company can make, particularly through rolling loans. And the owners must have been aghast at the storm of protest that erupted last month over the news that Wonga had been sending vulnerable borrowers threatening letters from bogus lawyers.

They hope that parachuting in a respected City name will persuade us that the company deserves another chance. Try telling that to people forced into a spiral of debt after being persuaded to take out a payday loan.

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