Wonga is bringing in a “money-back guarantee” and has unveiled new TV adverts aimed at a more middle class audience as the payday loans firm attempts to restore its reputation and move upmarket, reports The Guardian.
Following a year in which it was embroiled in scandal for sending out fake legal letters to struggling borrowers and cleared the overdue debts or charges for 375,000 people at a cost of £220m, Britain’s biggest payday loans firm has attempted to relaunch itself with its sights on the 13 million people in the UK that it describes as “cash and credit constrained”.
Wonga said it was trying to “move away from” people with more serious black marks on their credit files – but the changes do not include a fresh reduction in the company’s huge annualised interest rate, or APR, which currently stands at 1,509 per cent.
As part of the clean-up operation instituted by chairman Andy Haste, the company revealed it carried out consumer research into whether it should abandon the Wonga brand, but concluded that despite all the problems, it still had very high “prompted awareness” that was “right up there with the banks,” adding: “We are still seen as a trusted brand by our core audience.”
As part of the relaunch, Wonga announced several new product features that are either available now or will be introduced over the next few months, including a “24-hour money-back guarantee” allowing customers who change their mind to cancel their loan and pay no interest or fees, with no impact on their credit file; a three-day grace period, where customers who are one or two days late with their repayment will escape the £15 default fee; and freezing all balances in arrears to stop them racking up interest for longer than seven days – under the current policy interest can accumulate for 30 days.
Wonga has also “refreshed” its branding and website, and is launching a marketing campaign from Tuesday that includes TV, radio, press and online advertising.
One of Haste’s first announcements on taking up the reins in July 2014 was that the controversial grandparent puppets used in the company’s TV adverts would be dropped.
The new TV advert features “real-world hard-working people”, including a dental nurse, art gallery attendant and what appears to be a middle-class mother of young children, plus a school dinner lady, farmer and tipper truck driver.
A combination of the bad publicity and a lower profile over the past year means Wonga now has fewer than 600,000 customers, compared to around one million in its heyday.