Meet the (NWN:jewish)men behind Wonga 'loan sharks' firm who are laughing all the way to the bank
By: Steve Bird/NorthWestNationalists (sent by Invictus) on: 19.10.2012 [16:24 ] (2127 reads)
To the businessmen huddled around the rows of tables in the Ballroom of the Birmingham Hyatt hotel, the mood was a little like a speed-dating event. Amid the hubbub of the Conservative Party conference last week, scores of company executives vied for the attention of ministers.
After their allotted 20 minutes to chat up a senior member of the Government at one table, they would move to the neighbouring table where the next minister was waiting to be schmoozed.
Delegates from banks, oil companies and management consultancy firms had paid £1,500 a ticket in a deal which has sparked a cash-for-access controversy.
Some thrust their business cards purposefully across the table towards the politicians, others went for the more direct approach of shaking his hand.
Rolling in it: Wonga chief Errol Damelin and his wife Julie. Damelin co-founded the company with fellow South African Jonty Hurwitz (right) in 2007
It is understood that Michael Fallon, the Business and Enterprise Minister, David Gauke, the Treasury’s Exchequer Secretary, and Sajid Javid, its Economic Secretary, were among those being courted so enthusiastically at this Conservative Business Day.
Among the executives was a representative from Wonga, the payday loan company described by one MP as ‘legal loan-sharks’.
Wonga has an eye-watering 4,214 annual percentage rate (APR) if it was calculated over an entire year — although the company says that because its average loan is only for 16 days, the APR doesn’t apply and the real rate is 16 per cent. But why would this company be so eager to cosy up to Government ministers?
Wonga has an eye-watering 4,214 annual percentage rate (APR) if it was calculated over an entire year
Wonga has had a lucrative recession. It announced that last year it sold a record 2.5 million loans (equivalent to more than 6,000 a day), and tripled its net income to £45.8 million.
According to its accounts, its revenue — the cash coming in from that remarkable interest rate, fees and fines for unpaid debts — exceeded £184 million.
In fact, the only small figures in its accounts were its donations to charity: £9,000 in 2011, and just £1,000 in 2010. A spokeswoman insists, somewhat surprisingly: ‘We’re making a conscious effort to significantly expand our charitable initiatives this year.’
Perhaps the company saw the Conservative Business Day as a chance to bend the ear of politicians over calls from critics for the Government to impose a cap on the amount of interest firms such as Wonga can charge.
Business is booming because millions of people are taking out loans — in many cases to pay for essentials such as food and heating — partly thanks to an ever-expanding marketing operation.
Amid the hubbub of the Conservative Party conference last week, scores of company executives vied for the attention of ministers. Among the executives was a representative from Wonga, the payday loan company described by one MP as 'legal loan-sharks'
Earlier this year, Wonga’s multi-million-pound advertising campaign (the annual spend went from £22,000 in 2009 to £16 million last year) was criticised by the Office of Fair Trading as being particularly aggressive.
To make it easier to fall into the debt trap, Wonga even introduced an iPhone app, now downloaded by 1,000 people a day.
And make no mistake, the social problems relating to such loans are on the rise. The Consumer Credit Counselling Service and Citizens Advice Bureau saw a huge increase in people seeking help after getting into difficulties with payday-loan companies.
So who are the men behind Wonga — slang for ‘money’ — the controversial company that uses puppet pensioners in its adverts to explain how quick and easy it is to get into debt?
It was founded in 2007 by two South Africans, Errol Damelin and Jonty Hurwitz — both 43.
Damelin lived in Israel for eight years, where he set up a steel wire company, before moving to England at the turn of the Millennium to try to cash in on the internet boom.
In 2006, he teamed up with Hurwitz and began thrashing out ideas for a website that could make quick decisions on loans.
Remarkably, Damelin, who trained as an investment banker, has said his concept of lending through the web was born out of his student days in Cape Town campaigning against apartheid.
Base: Jonty Hurwitz, 43, who left his chief technical officer role at Wonga last November, but still sits on the board, lives in a West Sussex home with its own fishing lake, hot-tub and tennis court
In 2002, Errol Damelin and his family moved into a six-bedroom house they bought for £580,000 in North London. It is worth more than double that today
His concern at the time, he claims, was that bank managers could harbour prejudices about an applicant’s racial background.
Wonga’s decision-making does not involve a face-to-face meeting so such prejudices cannot be brought to bear.
(Of course, doing business online also removes considerable overheads.) Hurwitz boasts of being the brains behind the two ‘sliders’ on the company’s website (one sets the amount you want to borrow, the other determines the amount of time you want the cash for).
He also claims credit for the 6,000 to 8,000 so-called ‘data points’ Wonga says it analyses about a prospective client in the 15 minutes before agreeing or rejecting a loan.
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Damelin claims those ‘data points’ are the company’s ‘secret sauce’, but what they are effectively doing is carrying out a credit check.
The system has proved lucrative. Damelin is now said to pay himself more than £1 million a year and have shares in Wonga worth £33.6 million. Hurwitz has shares worth £25 million, though he has taken a back seat in the running of the operation.
Since its launch, Wonga had received close to £100 million in investment from some of the leading private equity firms in the world, including health charity The Wellcome Trust.
When Damelin started work on the company back in 2006, he paid himself just £400 a month. But he was anything but poor.
Four years earlier, he and his wife, Julie Blane Damelin, and two children moved into a six-bedroom house they bought for £580,000 in North London. It is worth more than double today.
Base: The headquarters of the company, which has advanced four million loans worth £1billion, can be found in an impressive Georgian townhouse in a posh area of central London which borders Regent's Park
Mrs Damelin, 43, works in public relations (she was communications manager for one of her husband’s other companies) and when he founded Wonga she was earning £75,000 a year and employed an au pair and a cleaner at their home.
Hurwitz has a history of number-crunching for banks. He married Chloe Lander, a 41-year-old violinist, in 2001 and five years later bought a sprawling £950,000 home (boasting five bedrooms, four bathrooms and six reception rooms) along the Surrey/West Sussex borders.
Hurwitz is company secretary, while his wife is director of a small drinks firm called The Babywater Company, although its registered phone number is dead.
While many of his Wonga customers are struggling even to pay for basic foodstuffs, Hurwitz is enjoying a more leisurely life as a sculptor.
He makes pompous claims that his creations are an attempt to bridge the gap between art and mathematics.
Many of his sculptures have a financial theme: one piece called Yogi Credit Crunch tries to ‘understand’ the 2007 banking crisis, something his mathematical brain has worked out was down to greed; another is about the hyper-inflation in Zimbabwe, and others are simply sculptures of himself.
Writing about his sculpture called Wonga.com, he boasts of having been the ‘thinker, the designer, the visionary’ in the ‘glorious moment’ when the company began trading. His art, he later says, is a way to ‘allow my ego to feel fantastic’.
Clearly not wanting to undersell themselves, the men are at pains to be seen as trendy internet entrepreneurs rather than grubby money-lenders. Their end-of-year accounts avoid describing the company as a money lender, instead describing it as ‘a technology company that has automated the end-to-end lending process’.
In their stucco-fronted Regency offices near Regent’s Park — Wonga employs 150 people in London and a further 200 in South Africa, where it has opened a call centre — there is a large painting of them looking suitably smug in the dress-down style common during the dot-com boom.
Earlier this year, Wonga's multi-million-pound advertising campaign (the annual spend went from £22,000 in 2009 to £16m last year) was criticised by the Office of Fair Trading as being particularly aggressive
A grinning Hurwitz sits cross-legged, while a pensive-looking Damelin rests his chin on his hand.
They know how important brand image is. The company’s logo adorns the football strips of Scotland’s Heart of Midlothian, Newcastle United and Blackpool FC (although a group of football supporters are campaigning to stop them advertising on strips and club websites).
The company was also forced to remove a page on its website suggesting its products were an alternative to student loans — a brazen claim when you consider the student loan rate is 1.5 per cent.
The National Union of Students branded the company’s tactics ‘predatory’.
The Bishop of Durham, the Right Reverend Justin Welby, also rounded on Wonga for its charges, claiming it was ‘usurious’ and using ‘deeply shocking’ rates.
Matt Hartley, of the Consumer Credit Counselling Service, is worried after receiving pleas for help from 16,500 people this year struggling to pay off debts to companies such as Wonga. ‘People are getting into serious difficulty with this kind of borrowing,’ he says.
‘The astronomical interest rates these lenders charge mean you can end up repaying vastly more than you originally borrowed.
‘Many borrowers also find themselves in a vicious circle — taking out new payday loans from other companies just to cover the interest on a debt with another.’
Around 2,000 of those contacting the Consumer Credit Counselling Service were juggling at least five separate loans.
If that were not bad enough, Wonga has launched a lending service for businesses, which can apply for loans of between £3,000 and £15,000. Interest rates vary according to Wonga’s risk-assessment of the business.
Many in the business community fear the banking crisis could see struggling firms having little option but to turn to Wonga.
Stella Creasy, an MP campaigning for a cap to the interest rates charged by payday loan companies, says: ‘Wonga’s profits reflect a growing level of debt and misery experienced by working families struggling to survive.
The company's logo adorns the football strips of Scotland's Heart of Midlothian, Newcastle United and Blackpool FC (although a group of football supporters are campaigning to stop them advertising on strips and club websites)
‘They have taken advantage of the rising cost of living and unemployment, as well as low level regulation of the money-lending sector.
‘We know from other countries what the solution is. There should be a total cap on the cost of credit, meaning that companies can charge a set amount for a loan which includes interest rates, fees and administration costs.
‘That way, loans cannot spiral out of control.’
Damelin believes a consumer having a so-called ‘Wonga moment’ of financial need is no different to them taking a black cab rather than public transport — it is simply convenient.
A spokesman at Wonga’s PR company insists the firm has ‘helped’ hundreds of thousands of customers with ‘vital cash flow needs’. ‘Unlike traditional lenders, we offer completely transparent pricing and don’t force people to borrow a pound more than they need,’ he says.
‘A typical loan of £200 for a couple of weeks costs roughly £2 per day in interest. APR is a misleading measure for such short loans, and people are happy to pay a clear price for speed and convenience in many circumstances.’
‘We have more customers recommending our service — 92 per cent — to friends and family than Apple or Google, never mind the banks.
‘We are genuinely committed to responsible lending and turn down two-thirds of applicants using our technology, and the best data we can buy. As a result, our customers all have bank accounts, are online and generally have choices between Wonga and bank products.’
If, say, a £400 loan taken out over 30 days is not paid the interest on the balance drops to one per cent for the next 60 days, although you would by then owe £525.48 and are hit with a £20 default fee. After those 60 days the debt is frozen.
If, as Wonga says, only seven per cent of its customers have missed a payment, that still equates to more than 250,000 people struggling with spiralling debt.
The spokesman says it freezes interest and charges on loans that have not been paid for 60 days if it cannot draw up a payment plan with the debtor using its ‘in-house collection team’.
Wonga has been criticised in the way it recovers debts, too.
In May, the Office of Fair Trading told the company to improve its system, adding it was effectively trying to frighten those who were struggling to make repayments by suggesting they were guilty of fraud and were at risk of being being reported to police.
A spokesman for the company said they ‘never’ use bailiffs, which must come as scant relief to those struggling to keep up rapidly rising repayments.
As well as the mental anguish of slipping further into debt, a reliance on loans can, in some cases, have an unwanted knock-on effect.
Earlier this year, Jason Simpson, 19, was jailed for 14 months for stealing £25,000 of jewellery after breaking into a shop in Melksham, Wiltshire.
The court heard that it was his first offence, and came after he had a ‘Wonga moment’ and borrowed £50 from the company.
That initial small loan, the judge was told, grew into a £600 debt and Hill became desperate. In that, at least, he is not alone.
Read more: http://www.dailymail.co.uk/news/article-2219878/Wonga-loan-sharks-laughing-way-bank-Firm-staggering-rates-pays-access-Tory-ministers--guess-wont-need-loan.html#ixzz29kwQqO9I
NWN: Interesting! A gang of foreign jews ripping off the lower echelons of our society and taking advantage of low skilled low intelligence and very desperate people in the UK. In other words WONGA are parasites.
Not surprising they support fellow jew and current tory Prime Minister David Cameron whose ancestors are very good at ripping people off. They used to mention their extrortionate interest rates but very soon get rid of that!