While the Obama administration is furiously scratching its head how to write off the debt of a few hundred million Americans, so they can once again load up on debt from scratch, spend like drunken sailors, and blow up the system once more, others are already a few steps ahead, such as UK's largest payday lender, the Wonga Group Ltd., which we learn today has written off the debt of 330,000 customers after British regulators introduced tougher rules to "protect consumers" such as Master Elliot Gomme, 20, who admits he lied to get a loan: "the 20-year-old admitted lying on his application and told Newsbeat it was "too easy" to be accepted."
This is how wholesale debt forgiveness is done: as Bloomberg explains the Wonga agreement applies to loans that wouldn’t have been made under new tightened lending criteria and that have been in arrears for more than 30 days, the London-based company said in a statement today. The company is writing off 220 million pounds ($356 million) in loans, according to a person with knowledge of the matter, who asked not to be identified because the information in private.
“The need for change at Wonga is real and urgent,” Wonga Chairman Andy Haste said in the statement. “Our regulator is determined to improve standards in consumer credit, and I share that determination. There is much to do in order to make Wonga a sustainable and accepted business, and today’s announcement is a significant step forward in that process.”
The U.K. payday loan market is being reviewed by the Financial Conduct Authority after a government survey found providers weren’t fully compliant with standards designed to protect consumers. Wonga, CashEuroNet UK LLC and Dollar Financial U.K. Ltd. are the three largest U.K. payday lenders, according to Bloomberg Intelligence.
Wonga also said today that about 45,000 customers who are less than 30 days in arrears are being given as much as four months to repay their loans without interest and charges.
Which is great news for Master Elliot Gomme, who admits he lied to get a loan. The best news: he now doesn't even have to repay it! Here is his story:
When Elliot Gomme needed money for a holiday, like many people he turned to payday lender Wonga. He needed £120 and says he didn't have a problem convincing them to lend him cash saying he was in full-time work.
But the 20-year-old admitted lying on his application and told Newsbeat it was "too easy" to be accepted.
He's now likely to be one of 330,000 people whose debts will be written off after a ruling that Wonga lent money to people who couldn't repay it.
"My bank couldn't give me an overdraft or anything, and so I went to them [Wonga]," he says.
He received his money and went on holiday, but a few weeks later he says the firm started calling him and he says they were "constant". "They were ringing me every day," he says. "They were telling me how much I owe and that there was added interest."
Elliot says that a few months later he was being told his debt had risen to more then £800 and it began to affect his day-to-day life. The longer it went on, the more he says he worried he would get about his situation getting out of control.
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Elliot is likely to be one of those to have his loan cancelled and says it's come as a relief. He says the amount of the debt was making him feel depressed and that he had "no idea" what he would have done if this ruling hadn't come.
Or, as the New Normal Dostoyevsky would say: crime, and no punishment.
In short, great job Elliot: you too have now joined the endless line of banks, corporate executives, deadbeats, Obamaphone-addicts and so on, who have managed to "lie" your way to some cash, and gotten away with it with zeroh punishment.
In the meantime, all those other taxpayers, who diligently, and idiotically keep paying their taxes to afford the crony bailout funding of the entire gamut from welfare queens to bailout recipients, are (and if they aren't they should be) wondering: "why the hell do we still keep paying the government?"