Any new company is going to experience teething problems and from time to time get things completely wrong. It appears that a few years back Wonga set up a couple of fictitious law firms and would send out to customers who had not paid back their loans on time, warning letters from these completely made up companies in the hope those letters would force their late payers to pay back their loans.

However, this practice has been frowned upon by regulators in the UK and they have ordered Wonga to pay compensation to every one of their customers who received one of these warning letters!

Wonga’s reply :

Whilst we cannot condone this activity, which incidentally Wonga ceased doing a couple of years back, as a fairly new company it was only be expected that they wouldn’t get things right, and as such if you received such a warning letter from Wonga in the past you will shortly be contacted by them and they will see that your compensation is either paid to you directly or is used to reduce any current loan you may have off them.

Since these warning letters from made up companies have been exposed, it also appears that a Government run company has also been sending out similar letters! The Student Loan Company who has been lending money to students for many years now always opted to set up a firm of fictitious layers and have been sending out warning letter to students behind on their payments!

So it will be very interesting to see if any student who has received such a letter will get some form of compensation from The Student Loan Company!

Be aware that if you do have repayment problems having taken a loan out from Wonga, they have put in place a straight forward and very fair policy to allow customers struggling to repay a Wonga payday loan to put together a repayment plan that will spread your repayments over several weeks or months.

If you do have a loan from Wonga and are going to be able to repay it on time then make sure you phone them up and discuss the problem for you are likely to find that not only will you be able to set up a repayment plan there and then over the telephone but Wonga may also additionally freeze your interest on the outstanding amount, which can only be a good thing!

If you are wondering whether you have to claim the compensation Wonga repaying, they have stated that they are going to contact each of the effected customers directly, and have additional information posted up on their website, including a full and frank apology for the way they operated in the past.

Log Book Loans are loans on which you are giving your vehicle up as security of the loan, however if you do wish to utilize the services of such a company then the car has to be owned by you and there must be no outstanding finance owed on the vehicle.

When you are interested in taking out a log book loan then you need to take your vehicle along with all associated paperwork of that vehicle plus several forms of identification to a local office, and whilst there they will inspect your vehicle and all associated paper work and will make you an offer of an instant cash loan there and then on the spot.

If you decide to take them up on the offer you will then have to sign a bill of sale which basically sees you keeping the car to use but the Log Book Loan company will own the car should you fail to keep repay the original loan.

However, we are aware of many people taking out log book loans and then when before the loan is due to be repaid they will sell the car on to another person! This then means that the person who has purchased the car is not legally the owner of that vehicle, even though the have paid for it, it is in fact the Log Book Loan company who own the car.

This could result in the Log book Loan company then sending out recovery agents to repossess the car form the person who bought it, and even though that person may have a full receipt for the vehicle they do not own the car and will risk losing it should the original loan not be repaid there and then by either the person who took out the loan or the new owner of that vehicle.

With this in mind if you are every in a position where you need to use the services of a Log Book Loan company then you should never try and sell on the car as that is a criminal act or at the very least an act that could see you being taken to civil court, and if you are in the market for a new car then always make sure you do a full HPI check on that vehicle to double check whether there is any outstanding finance owed on that vehicle, and if there is then do not buy that car as you will risk losing it if the loan taken out against it is not cleared in full!

Do think long and hard about taking out one of these types loans as you do run the very real risk of losing your vehicle should you find, for whatever reason, you are unable to make the repayments as arranged!

Buy Back Stores are opening up in great numbers in almost every town and city in Great Britainand unlike a pawn brokers they will accept almost anything you care to take in as a form of security on the cash you borrow from them.

How it works:

It is not uncommon for people to take to such places large screen televisions, CD and DVD players or in fact any house hold item, and the way these venues operate is identical to a pawn brokers shop.

You simply take in whatever household item you want to give them as security, along with a couple of forms of identification, they will then value the item for you and give you an offer there and then based on the type of item you are borrowing against and its current condition.

You will then be given up to 28 days to return to the shop with the amount of cash you borrowed and the interest payment and they will then give you whatever it is you handed over as security in exchange for that payment.

The Downside of Using a Buy Back Store

Unlike a payday loan you are offering up something as security when you are using the services of a Buy Back Store and if you do not make the repayment of the original loan and the interest on the day arranged then you will no longer own that item and the shop will be allowed to sell if, often for a profit and you will have no right to claim it back nor get a cut of any profit they make selling that item!

It is also worth noting that the value of the item you are giving up as security for the short term loan is going to be much less than its current market value. You will often find the Buy Back Store will often only give you 10 or 20 percentage of an items current value as a loan, so always be aware of this fact as you are very unlikely to get anywhere near the amount of cash as a loan as you may be expecting when using such a service!

The interest rate you will be charged for using the services of a Buy Back Store will also vary depending on which company it is that owns the business. However, if there are several such store in close proximity to each other it may be worth shopping around and taking your item into each store to see which one gives you the best offer for it!