Yes, Wonga lent at shocking rates – but it was customers who lied

‘Payday Lady is not trading at this time,’ says her website, sounding a little like La Dame aux camélias. Indeed (since I could not find her anywhere) the message may indicate that Payday Lady is not just temporarily indisposed, but has given up the game altogether. I’ll be glad to hear from her if she hasn’t.

Meanwhile I can report that her rival Cash Lady (who promises she’ll be ‘here to help you’ within three minutes) was still out there — despite having her television ads banned last year — and so were Purple Payday, Pounds to Pocket, Peachy Loans, PayDay Pig and CashCowNow, all at colossal ‘representative APRs’ that look relatively cheap compared with Wonga’s notorious 5,853 per cent. But the majority of lenders in this crowded space are likely to join the lady in retirement when a strict new cap on credit terms is imposed in January by the Financial Conduct Authority — which has ordered Wonga to introduce stronger ‘affordability’ checks and write off the debts of 330,000 delinquent customers who would never have passed those tests.

Only the largest payday lenders are expected to survive the FCA’s draconian ruling — ironically including Wonga, which has some 30 per cent of the market but may have to change its tarnished branding. The implosion of this cynical sector, which grew like a mutant fungus out of the credit crunch, will be greeted with righteous satisfaction by everyone from the Archbishop of Canterbury down. But the episode should not be allowed to imprint in the public mind the modern narrative that the consumer is always a victim; yes, some naive or desperate borrowers fell into that category, but very many others just grabbed the opportunity of quick and easy injections of cash.

Consider the case, highlighted by the BBC, of 20-year-old Elliott Gomme, who ‘lied to get a £120 Wonga loan for a holiday’ and ‘felt depressed’ when he discovered his unpaid debt had risen to £800 — but is likely to be among the lucky 330,000 whose loans will be written off.