Short-Term Loans Website Takes Down Article On Student Finance After Widespread Criticism
Short-term lender Wonga.com tonight announced it is taking down information on student finances from its website following accusations it was encouraging undergraduates to take out one of its high-interest loans.
The National Union of Students (NUS) had branded the firm "highly irresponsible" for carrying what it called "predatory marketing" and had called on the company to withdraw it immediately.
In a statement tonight, Wonga said it was taking the information down because it does "not actively target students as potential customers and we wanted to clear up any confusion about that".
The website had contained a section on student loans in which it suggested that young people could take out one of their short-term loans for "occasional emergencies or unexpected events".
It said: "A student loan is fine to help you pay for your university and living costs, but what about those times when you're waiting on money to come in and you need to buy or pay for something unexpected now?
"There's a totally new way of borrowing money to see you through until your next cheque and it's called Wonga.
"A Wonga loan is essentially a short-term loan that can help you manage your cash flow - without having to extend an overdraft or credit card even further, or get a large student loan."
It adds: "Student loans are usually far cheaper than your standard personal loan. But there can be a downside - you potentially end up borrowing more than you need, while a nasty debt accumulates for your graduation that could take years to repay.
"With a Wonga loan the interest rate is much higher, but you only borrow it for a month and pay the loan back on a date that suits. For those occasional emergencies or unexpected events, it means you can carry on with life without a long-term debt that keeps accumulating."
The website did also encourage students to minimise loans and budget their money.
Wonga said tonight it was removing the section on student loans.
In its place is a statement which says: "We took it down because we do not actively target students as potential customers and we wanted to clear up any confusion about that.
"We listen to our customers and public opinion, so it was clear the old article here gave rise to misunderstandings.
"We would like to clarify that Wonga does not target students. Yet we do not discriminate against working, adult students who may choose to apply either, because all applications are assessed in the same robust and completely objective way."
Students represent a "minuscule" proportion of customers, the firm said, and the article was "several years old".
Earlier today, Pete Mercer, NUS vice-president (Welfare), had said: "It is highly irresponsible of any company to suggest to students that high-cost short-term loans be a part of their everyday financial planning."
He said Wonga should "immediately withdraw this predatory marketing, which contains information that appears to be inaccurate, and is aimed at financially vulnerable young people."