Payday lender Wonga has come under fire from a privacy firm after discovering in the fine print that borrowers can only take out a loan from the company if they waive the right to transmit personal data to individuals. third.
The payday loan company, which offers same-day loans at 4,214% APR, has grown dramatically in recent years as more people find themselves under financial pressure and seek cash flow solutions short term.
But in order to take out a loan from the company, borrowers are required to accept a privacy statement that undertakes to personal information transmitted – no loan can be taken out without this authorization.
Payday Lender: In a privacy statement posted on Wonga’s website, it states that you must agree to your personal information being passed on to third parties in order to obtain a loan.
“In addition, you consent to our sharing your data with carefully selected third parties who may contact you by electronic means (including SMS and email) about unspecified products and services. “
From the wording, it appears that mobile phone numbers and email addresses could be used by a plethora of independent businesses looking to offer other products to those taking Wonga loans.
Justin Basini, CEO of privacy firm ALLOW, said: “It is baffling to know that your personal data could be passed on to other companies, possibly for marketing purposes.
DID YOU KNOW?
Wonga is the 14th most downloaded free financial “app” on iPad.
“However, politics reveal hidden wickedness. Normally, the wording of privacy policies is quite vague, but this is blatant.
“The invisible market for personal information is actually quite large with all kinds of online businesses desperate to find out more about you. Personal data is exchanged for profit and we believe it is time for people to know what was going on. ‘
But Wonga is adamant that he doesn’t sell third-party information for profit and therefore says it doesn’t matter if borrowers give up their rights.
So do they only accept the customs of those who allow their data to be transmitted?
Apparently not. A spokesperson told me, “The short answer is no, because we don’t actually sell or pass any information on to third parties.
Black and white: its website indicates that you must agree to the transmission of personal information
No opt-out option to keep your information hidden
After browsing the website as a potential customer and filling out an inquiry form, I can confirm that there is a checkbox at the bottom to confirm that you have accepted its privacy statement.
However, there is no opt-out option for these privacy terms. or the mention indicating that you accept the transmission of your data.
This leaves potential borrowers at risk of data being passed on to others, as it is described in black and white in the terms and conditions that it can be – even though Wonga says it is wording. “Historical” and that it does not transmit information.
Wonga spokesperson said, “There is an opt-out option for people to receive marketing communications from Wonga. There is none for third parties as we do not sell any data, that is, say … if we did, we would rectify that, but we have no intention of doing so.
Would someone who took out a loan with Wonga be bombarded with text messages and phone calls from third parties?
Again, apparently not. The spokesperson said: “Absolutely not. We don’t sell any data and our own marketing communications are very customer-friendly and we would never bombard them with emails or texts.”
So if the above is the case, then Wonga should take his word for it and change the “historical” statement on his website – because as it is, customers are okay with the information going and are powerless to stop it. ‘they want a loan.
I contacted the regulator, the Financing and Leasing Association (FLA) – but they declined to comment on the wording of the privacy statement.
It also seemed to alert Wonga, who contacted me shortly after calling the FLA to ask why I was persevering with a potential story about personal information being passed on to third parties.
Wonga is no stranger to controversy
The payday lender is no stranger to controversy. In January, he was criticized for offering short-term student loans.
Its website said, “Student loans are generally much cheaper than your standard personal loan.
“But there can be a downside – you potentially end up borrowing more than you need, while bad debt builds up for your degree that could take years to pay off.
“With a Wonga loan, the interest rate is much higher, but you only borrow it for a month and pay off the loan on a date that works for you. “
The payday lender, when confronted, said the page was only there for search engine optimization (SEO) purposes.
He said at the time: “The two web pages in question are examples of the many SEO pages on our site, which is basically content covering all aspects of credit designed to help our particular option show up in internet searches. general loans or credit.
“With respect to the content of these pages, we are simply pointing out the risk and high cost of unauthorized overdraft fees, as well as the potential trap of long-term debt versus a short-term solution.”
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