I’d never heard of Wonga until today but, thanks to the free advertising provided by Justin Welby, I’ve not only heard of the company but discovered that it now has a Canadian branch.
The Archbishop of Canterbury – eager to set the world to rights, presumably because it looks easier than setting his church to rights – was furious to discover that, having denounced Wonga, the CofE has indirect investments in it; Wonga is a short term loan company with outrageous interest rates.
Investing in Wonga is, according to Anglican lights, not ethical, implying that Wonga itself is not ethical. The reason, I imagine, is Wonga’s interest rates: if you borrow $500 from Wonga and repay it in one month, you will have to repay $600 – 20% interest per month. That is atrociously high; but unethical? Surely it would only be unethical if the actual interest rate were concealed from the hapless borrower until it was time to repay.
When does an interest rate cross the threshold from ethical to unethical? A credit card company’s 1.5% per month is still high but it doesn’t seem to have met the Anglican criterion needed for ritual excoriation.
Justin Welby clearly doesn’t think charging interest on a loan is inherently unethical because he wants to set up credit unions in competition with Wonga. They will still charge interest but they won’t make a profit.
So profit – or capitalism, really – is the enemy.
Here we go again: another Archbishop of Canterbury who hates capitalism.
It is not only unethical, it is quite possibly illegal by the various usury laws in the country.
David, the edit function isn’t working tonight. Can we get that back please? Thank you.
It looks as if the plugin that performs that function no longer works correctly with another feature that was updated. I expect there will be a fix at some point.
In our house we teach our children to not buy something until/unless they already have the money. We see billboards in our town for other short term lenders and point out to our children how much these things end up costing.
As to the ethical standards of such businesses? Christian ethics would dictate that we treat others the way that we would like to be treated. But such is no longer the norm. I remember back in University in one of my courses the subject of business ethics was covered. The standard for ethics was “do no harm”. So is it “harmful” to charge someone 20% per month? Presumably the borrower would be intelligent enough to figure out if such an interest is harmful, and that they still willingly and knowingly agree to it give indication that the borrower has determined this interest rate to not be harmful. Thus all is ok.
From the source article:
“The Church’s Ethical Investment Advisory Group “recommends against investment” in companies which make more than 3% of their income from pornography, 10% from military products and services, or 25% from other industries such as gambling, alcohol and high interest rate lenders.”
Is it just me or does something seem amiss here? Are they saying that 2% of profits from pornography is ok? Perhaps I am bit to “cut and dry” when it comes to such things, but to me if 3% pornography is not ok than even just 0.000000001% is not ok! Or to put it a bit more black and white, either it is ok entirely or it is entirely no ok!
I also have to wonder if the “military products” includes the transport aircraft that our Canadian Armed Forces uses to deliver disaster relief? What about the aircraft and naval craft used for search and rescue missions? How about the cost of the guns our soldiers carry when on UN peace-keeping missions?
It’s another payday loan company. They are legalized loan sharks, and I think they should be illegal. Here’s a quote from the Financial Post:
“Governments have never been comfortable with the idea that companies could profit by offering what amounted to predatory loans to a segment of society who can’t get a bank account or a credit card
…
Over in the U.K., Wonga is among the group of 240 companies under formal investigation by the U.K.’s Office of Fair Trading after almost 700 complaints were filed last year. Last November, the OFT said it is concerned about “aggressive debt collection practices” and whether the companies are actually providing affordable loans.”
Full article here: http://business.financialpost.com/2013/02/27/payday-loan-companies-in-government-crosshairs/
I am genuinely astounded that good folk are surprised by this latest development. Abba Ministries of Canada has at least two websites [abbacanada.org and jesusofnazareth.ca where I have been plugging away at the Anglicans for years due to their distasteful financial activities and the consistent worship of Mammon.
The folk who use these loan sharks are desperate people: they care not about the cost, but only the ‘fix’, whatever that is, that the loan will buy!
Welby; Hiltz and their predecessors have been profiting from, and creating human misery for many years…