Seemingly jokey, but with an undercurrent of vitriolic sentiment.

Following the announcement that short-term loan lender Wonga is to sponsor of Premier league football club Newcastle, the last 24 hours on Twitter have been fascinating. I’ve witnessed corporate trolling, ignorance and respected media outlets (that should know better) disseminating miscommunication to (IMHO)  generate retweets.

For those that aren’t familiar with Wonga, the company offers small value (up to £1000), 30-day loans. It’s all online and highly accessible. However, despite mass-media print and television advertising the company has been unable to shake off the image of a high-street loanshark.

This is largely due to a single number; Wonga’s APR of 4,214%.

Let me state now that I’ve not used the service, don’t intend to and wouldn’t advise my friends to either.I think there are better ways of financing your existence than payday-style loans. However, I don’t feel it entirely fair that Wonga has become public enemy number one, with highly misrepresentative reporting suggesting that at that APR a few hundred pounds would cost thousands to repay after just a few years. Following the Newscastle sponsorship news, the Twittersphere followed with, IMHO, poorly informed and damaging vitriol.

This Tweet was retweeted over 2,500 times in a few hours (with variants accounting for thousands more):

“Wonga are to pay £24million to sponsor Newcastle over 4 years. If Wonga lent that @ their typical APR over 4 years they’d have to repay £4bn.”

It’s the sort of tweet that grabs attention. It’s seemingly jokey, but with an undercurrent of vitriolic sentiment.

The point is, it’s misleading. As a short-term loan provider, Wonga lends for a maximum of 30-days. Suggesting anything otherwise is an empty, vacuous statement that does little more than disseminate misinformation.

But they wouldn’t…would they…

You see, UK regulation means it must publish an annual interest rate (APR) which, for payday-style loans of 30 days, is not transparent or informative.

In Wonga’s own words.

“Our service has a Representative APR of 4214%, but bear in mind that APR is a measure of annual interest and assumes theoretical compounding. A Wonga loan is only for between one day and a month and the shorter (and lower cost) our loans become, the higher the APR becomes!”

In reality, its interest rate runs at about 1% per day.

Now, let me make it clear that I actually agree with the sentiment that in these times I do think it morally dubious for Wonga to be sponsoring the premier football club in one of the UK’s most insolvent regions. However, I’ll argue that case on the facts.

But the Twittersphere so easily overlooks the facts.

Worryingly, even Twitter accounts associated with respected broadsheets newspapers decided to get in on the action in a bid (one can only assume) to generate valuable retweets.

Telegraph Sport even went so far as to suggest that:

“Wonga pay #NUFC £4m PA. By our calculations, if Wonga loaned you £4M your annual interest would be £164M (Plus £5.50 transmission fee)”.

But they wouldn’t loan you £4m and they wouldn’t charge you interest over a one year period would they Telegraph?

Getting in on the act to generate retweets?

And the BBC….even their video makes the misleading statement “[Wonga] charges an eye-watering 4000% interest.”

No, Wonga loans have an APR of over 4000%. It’s very, very different.

It’s dangerous corporate trolling, and despite my personal feelings towards sort-term ‘payday’ loans of this nature you have to feel for the Wonga brand manager. In any other ‘official’ media channel, many of the statements I’ve read on Twitter would be classed as slander. How you manage that conversation is a fascinating marketing challenge.

Social media makes it easy for a brand to become very tarnished, very quickly.

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