They are believed to be aiming to bring in more middle class customers with a new advertising campaign to start this year.
The last year has been a difficult one for Wonga. They have been at the centre of much controversy after sending its customers letters from a fake legal firm to try and bully them into making repayments that they were struggling with.
This resulted in them having to write off the debts of 375,000 people, a move that cost them around £220m.
They have stated that they are now trying to “move away from” customers with poor credit ratings, or ones that will be unlikely to be able to afford repayments. This means that they are now looking at a customer base of around 13 million UK residents that the company has described as “cash and credit constrained”.
Their new Chairman, Andy Haste, has stated that they have decided not to rebrand, after a customer review concluded that the “Wonga” brand was still seen as “trustworthy”. He also described Wonga as being “right up there with the banks” when it came to its “prompted awareness”.
However this new claims have not seen them do away with some of the more controversial aspects of their business model. These include their monumental interest rates that stand at around 1,509%.
Wonga have announced several new ideas that are supposed to give customers a fairer deal when they take out a loan with them. One of these new features is a “24-hour money-back guarantee”, which will allow new customers to cancel their loan, within 24 hours of taking it out, with no interest or additional charges. They have also introduced a three day grace period after repayments are due, which will mean they can get away without paying the £15 fine. Interest on late payments will also stop after seven days now as opposed to the 30 days that it stood at previously.
Wonga’s customer base has shrunk over the past year to just under 600,000 – compared to the 1 million that it once had. Apart from its bad publicity, it is thought that a dip in advertising was to blame for this fall in sales.
Wonga are now preparing for a brand new advertising campaign that will launch across television, radio, press and online. They also dropped their advert that starred a series of puppets – many people complained that adverts like this were making children too aware of pay day loans. They have also removed their adverts from a number of television channels that are popular with younger people.
Despite the relaunch, Wonga will find it hard to shake the criticism that it has drawn from a number of high profile sources. The Church of England labelled Wonga as “morally wrong”, whilst politician Stella Creasy stated that they were simply “loan sharks made legal”.
Tara Kneafsey, the CEO of Wonga UK, stated: ìOur new product features and todayís marketing re-launch are further proof of the action weíve taken, and continue to take, to ensure Wonga is lending responsibly and putting customer outcomes first,î ìOur focus is on serving hard-working people throughout the UK who need access to transparent, flexible and short-term credit products.î
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