The Money Shot – 13th January 2012

Covered mag, presented by Gocompare.com
  • | by Kristian Dando

"A MORAL DISGRACE"

Spare a thought for Britain's students. If they’re not fretting over exams and coursework, then it's the prospect of skyrocketing tuition fees, a diminishing graduate jobs market or the ever-rising price of Thunderbird.The last thing they probably need is to be cajoled into further unsustainable debt. Because that's what appeared to happen this week.

An article on the website of unsecured finance firm Wonga which suggested that payday loans were quite a good idea for students came to the attention of the public, prompting a thoroughly incandescent response.

The company (whose representative APR is 4,214 per cent) breezily suggested:  "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.”

Notoriously media-shy personal finance guru Martin Lewis was amongst the many outraged parties, and took to Twitter to register his disgust. “Wonga you're a moral disgrace,” he Tweeted yesterday afternoon. Later, the Money Saving Expert commented: "We already have a problem of a financially illiterate nation and no financial education in schools, so this smacks of high cost financial grooming.”

The National Union of Students didn’t exactly have kind words, either. Vice-president of the NUS, Pete Mercer fumed: “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.”

Cue the sound of furious backpeddling from Wonga HQ as the offending piece was removed. “The previous article on this page was several years old and one of many brief pieces we have written about the broad subject of credit since we launched our online loans service,” ooo-erred the Wonga team, presumably casting furious glances at a quivering copywriter and distancing themselves from the original article. "We took it down because we do not actively target students as potential customers and we wanted to clear up any confusion about that," they continued.

It’s probably safe to say that any ideas they may have had for ‘Tuck shop financial solutions’ articles targeted at the under 12's market have now been mothballed for the time being…

Quote of the week

"Car Insurance going up cos English people have weaker necks than the whole of Europe. #WhipLashConArtists"

X-Factor winner Steve Brookstein gives his robust views on the rising cost of automotive insurance via Twitter. As his own career so often resembles something of a car crash, he’s well qualified to comment.

Energy Rush

Hard-pressed consumers would be forgiven for rubbing their eyes with disbelief this week at the sight of four (EDF, British Gas, SSE and nPower, since you ask) of Britain’s so-called ‘big six’ energy companies actually reducing prices.

After all, it was only a year ago that the relentless price hikes began their inexorable march, with the nation collectively sniffling and shivering and feeling altogether sorry for itself in the grip of a ‘big freeze.’

So, while customers who switched to a fixed rate tariff are now likely to be waving their fists in anger at the prospective savings to be made (generally around £25 a year), you can’t help but think that if one ‘big six’ energy company decided to jump off a cliff, they all would - much like the green-haired lemmings of the classic computer game of the same name.

Still, it was a welcome bit of positive publicity for the ‘B6’. Earlier in the week, consumer organisation Which? published its 2012 energy satisfaction survey, in which the larger energy firms were knocked into a cocked hat by much smaller companies.

Meanwhile, nPower and British Gas were slapped on the wrist to the tune of a total of £4.5m for poor handling of energy complaints. Conveniently timed price cuts? Surely not. Still, if it means that the energy companies are falling over themselves to offer consumers a better deal, long may it continue.

In brief

Insurers took a severe buffeting by the strong winds that battered Britain this month

AA Insurance reported a 200 per cent increase in claims on the same period the year before.

The Daily Express reckons that the average holiday will cost £300 less this year.

Dogs cause upwards of 2000 arguments during their lifetime, according to esure.They didn’t specify how many of said rows were accounted for by “I swear it was the dog that did it, love” disputes.

On Gocompare.com News this week…

“Haul your doughy post-Christmas carcass off the sofa and do a spot of mild exercise,” implored Kristian Dando.

Dave Jenkins gave some sage advice on buying a dog.

Maxine Frances Roper had a sextet of suggestions for beating the January blues.

Chris Pollitt, a man who’s bought and sold far more cars in his relatively short time on this earth has any right to, rounded up a selection of six tantalisingly obtainable cars for £2,000 or less.

And finally…

A pub in Newcastle has started selling a beer brewed specifically for mutts. The Branding Villa, in Newcastle, has also devised a Sunday menu, so dogs can get in on the roast action with their bipedal buddies. We’re tempted to pay it a visit, but we hear it’s a bit ruff. (Sorry.)

Join us next week for another thrilling instalment of THE MONEY SHOT.