Closures at BongaLoans, Reddies Direct and SafeLoans
Frequent lender check ups are made to keep track of any recent service updates such as on costs, repayment options etc. It isn’t common to be met with closures, but on a payday lender search this is exactly what happened with BongaLoans, Reddies Direct and SafeLoans. Outside of this trio, Wage Payment and Payday Loans Ltd (WPPL) has been closed down by the FCA. They traded as DoshLoans, Payday Overdraft and WagePayday. We never got around to profiling these brands since they haven’t been permitted to lend since summer 2014. It has just been confirmed in July 2016 that their interim permission has been cancelled and the owner has a permanent ban.
There have been a few other changes. Tide U Over now trades as a broker rather than lending out of their own pocket. Pogo Loans, The Money Shop and Trusted Quid all remain active, but they have however removed their single month term (we’d assume due to the Google AdWords ban). It was surprising to learn of so many changes, but this is kind of expected in the payday sector these days. It has become a minefield since loan capping was introduced and there have been licensing issues with firms having to gain authorisation. One thing to add is that we have checked over a selection of providers and so further closures and product changes are likely.
This will become clear over the coming months. Whilst things don’t appear great at this time, an imminent collapse in this industry isn’t going to happen. The positive news has seen 3 new brands arrive in 2016 that includes Drafty, Sunshine Credit and Vivus (relaunch). This trio has each launched with competitive rates of interest and so with the right promotion they’ll have the credentials to trouble the majors who will have been gaining further market share as each closure has gone through. Just going back to the 3 closures, SafeLoans have kept their site live that informs that they are dissolved. The BongaLoans and Reddies Direct sites have each simply been taken down.
Both Bonga and Reddies each launched back in 2011. Reddies was the better choice based on their term flexibility that allowed repayments from a single day up to 30. We can only guess at the reasons behind each going bust, but it would be likely that they would have simply struggled to gain new business. Neither particularly invested much in advertising in recent years. There was likely also licensing issues with Bonga/Reddies. Price capping doesn’t appear to be the core problem, since each charged less than what the regulator asked them to. To see SafeLoans close was more of a surprise. They are rooted to 1989 (we believe starting as a store). They also hit the web early on in 2003.
Safe always came across as one of the more responsible lenders on the scene backed up by dual trade association memberships (BCCA and CCA). The ins and outs of their service was also thoroughly presented on their site. It has been quite a classy exit on their part as well, in keeping the notice live that thanks their customers for their support over the years. Here it states that they ceased trading on the 1st May 2015. This notice appears more recent though since we had checked up on them not long back. This niche is clearly in decline, but the public interest is still high and this is why top lenders like Wonga will continue to thrive.