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Wonga: We'll cut our rates; 'CUDDLY' TV PUPPET ADS ALSO AXED.

PAYDAY lenders Wonga are set to cut their sky-high rates to repair their battered image.

The industry giants are expected to reduce other fees too after new chairman Andy Haste ordered a profithitting overhaul of the business. Haste got to work immediately by killing off Wonga's advertising pensioner puppets.

The former boss of More Than insurance owners RSA said the characters were too likely to appeal to the young and vulnerable.

Adverts could also be pulled from TV channels and at times when children are watching.

The firm's sponsorship of Newcastle United was initially thrown into doubt when Haste said: "Everything is on the table."

But Wonga later insisted there were no plans to end the Newcastle deal.

The shake-up comes as Wonga try to repair their image after being landed with a PS2.6million bill for sending customers threatening letters from made-up law firms.

Haste, who admitted he thought long and hard before taking the job, called the scandal "extremely regrettable". And he said the company needed to undergo "fundamental change".

Wonga's fees, charges and interest rates will come under scrutiny in a six-point review.

Their annual percentage rate - APR - is a whopping 5853 per cent, although they argue this is misleading because customers borrow for because customers borrow for much shorter periods of time. much shorter periods of time.

Haste said: "We are going Haste said: "We are going into a world where we will into a world where we will have price caps. That's necessarily going to mean we review our fees, our interest review our fees, our interest rates and our charges and I rates and our charges and I suspect they will go down." suspect they will go down."

He said tightening lending He said tightening lending rules would also mean a drop in customer numbers, denting profits, which soared 35 per cent to PS84million in 2012.

Haste said Wonga grew too fast, reaching a million customers in just seven years.

He said: "The problem with such a rapid rate of growth is that some of our systems, our processes, our controls haven't kept pace and some serious mistakes have been made."

Haste, whose other priority is " Haste, whose other priority i finding a new chief executive after finding a new chief executive after co-founder Errol Damelin quit last month, will be paid PS500,000 a year to begin with, reducing to PS300,000 over time when things are less intense.

Citizens Advice chief executive Gillian Guy welcomed the ditching of the puppets, saying: "Years of debt are not cuddly or jovial but tough and distressing."


OUT Wonga 'pensioners'

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Title Annotation:News; Opinion; Columns
Publication:Daily Record (Glasgow, Scotland)
Date:Jul 15, 2014
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