Wonga’s apology: The unanswered questions.

June 25, 2014

Today, the Financial Conduct Authority (FCA) ordered the payday loan company Wonga to pay compensation worth over £2.6 million to customers who were sent threatening letters from fake law firms – Chainey, D’Amato & Shannon and Barker and Lowe Legal Recoveries – invented by Wonga. Wonga also added charges to the accounts of those struggling, threatened customers, for “administration” costs that it incurred whilst inventing law firms and sending threatening letters from them.

The weak apology that Wonga released is as expected from a careless corporate entity who “surprisingly” grow a conscience the moment they’re exposed. The Wonga PR team has obviously been working in overdrive to produce the narrative that Wonga officials will be using on this subject. A clear example: Tim Weller, the interim CEO of Wonga said:

“We would like to apologise unreservedly to anyone affected by the historical debt collection activity and for any distress caused as a result.

– “Historical debt collection activity“. Incredibly creative and manipulative corporate term, devoid of all meaning, employed to mask their crimes as best as possible. But this is the line they’ll be using. Their weak, five line apology for causing unnecessary pressure for vulnerable people uses the same term:

“Historical debt collection issues”

– Their website uses the same phrase:

wonga3
– Their social media apologists are using the same term:

wonga2

wonga1

wonga4

wonga5
– So, that’s their CEO, their website, their social media presence, and replies to complaints; all using the same manipulative, obnoxious phrase in the hope of masking the seriousness of the offence. Which suggests a consciously devised effort to underplay the damage that their grotesque strategy between 2008-2011 (and one they’ve only just realised was wrong, on the day they were ordered to compensate victims) inflicted upon over 44,000 people.

Perhaps it is also worth noting that the policy was used between 2008-2011, immediately after a massive financial crises pushed many to financial breaking point. This was a policy designed to feed off of that misery, its timing is telling. This was a time more people would be forced to go to payday loan companies, and Wonga played on that vulnerability, seeking to harm customers, rather than help. And today they apologise, with five lines of text on a website, and a coordinated media policy. Though the use of the phrase “Following today’s announcement from the FCA…” betrays their enlightened, new found conscience. Like an unrepentant child forced to apologise after getting caught.

I wonder then, if the room they’ve sat and discussed the creative language they will be using to try to save face, was the same room they used to devise the original threatening strategy in order to harass the most vulnerable, in the first place. Because the apology leaves several unanswered questions that I’d quite like to see answered:
1) Who originally came up with the idea to invent law firms, and send threatening letters to intimidate their most vulnerable customers? Give names.
2) Which executives knew about it, and signed off on it? Again, give names.
3) Did Damelin know about it? Is that why he stepped down from the board less than two weeks ago?
4) Are those responsible for coming up with the strategy, still at the company today? If so, why?
5) If it was stopped in 2011, why has it taken the regulator to claw an apology out of you, three years later?
6) Did Adrian Beercroft – a major shareholder – know about this, before he donated to the Conservative Party?
– Wonga is run by human beings. Its strategy is devised by human beings. When the most odious strategy is exposed for the crime that it is, those sociopaths responsible for inflicting it upon so many people, do not get to hide behind the corporate name. It is well within the public interest to know if these people are still at Wonga, and if they are no longer at Wonga, where are they now? If they are no longer at Wonga, do the businesses they now work for know who they’ve employed? In the interests of what Wonga call:

“…the principle of transparency on which our business has been built…”

– The public (especially those directly affected) certainly have a right to know who was responsible for devising a strategy that specifically targeted the most vulnerable at a time of massive economic crises, for their own gain.

Call the free phone Wonga helpline, and ask for the names of those responsible for the threatening, invented law firm policy:
0800 840 0836


The United States House of Wall Street.

November 25, 2013

Source: Wikimedia Commons. Author: Andrés Nieto Porras.

Source: Wikimedia Commons.
Author: Andrés Nieto Porras.

An interesting vote took place in the House of Representatives at the beginning of this month. A vote completely overshadowed by constant Republican tantrums over the rollout of the Affordable Care Act. A vote that has potentially serious consequences in the future.

The Wall Street Reform Act of 2010 (Dodd-Frank) included Section 716, which ensured that banks insured Federal Deposit Insurance Corporation, move their ‘swaps’ (a certain derivative) into non-bank arms of the business that aren’t insured by FDIC; not eligible for bail out funds. It ensured protection for the consumer’s savings, and ensured protection for the taxpayer, by enforcing banks to place their more risky derivative deals outside of the realm of Federal assistance.

At the end of October 2013, House Resolution 992 passed the House by 292 votes to 122. The Bill – H.R.992 – or The “Swaps Regulatory Improvement Act” – severely limits the reach of Section 716 of Dodd-Frank, ultimately striking down a key regulation that Dodd-Frank implemented back in 2010. The implication, simply put, is that incredibly risky Wall Street behaviour surrounding the dealing of derivatives could be backed by a taxpayer funded bailout – for exchanges that are not at all related to banking – if it all goes wrong again.

Despite the Treasury raising concerns about striking down such an important provision, the House – including many Democrats – voted to pass H.R.922. But why? What is the motivation? Well, one only has to look at the lobbying on this Bill to understand just how this may have come about.

Contributions to House members from interests groups who expressively support H.R.992 are rather eye watering. On the list of top contributions to House Members, Jim Himes (D-CT4) – a co-sponsor of the Bill – received $437,179 from special interests in favour. More than any other Democrat in the House. The second ranking figure in the Democrat House Leadership chain of command, Steny Hoyer (D-MD5) received $266,510 from Wall Street supporters of the Bill. The most expensive ‘Yes’ vote for Wall Street comes to us via Eric Cantor (R-VA7), who received $525,400. The main sponsor of the Bill Randy Hultgren (R-Ill) received more contributions from the Securities and Investment industry than any other industry, at $136,500.

In all, special interests supporting H.R.992 contributed 5.9 times more to House members than those groups that opposed it. Wall Street has been staggeringly influential in ensuring regulations from 2010 are struck down. Citigroup were among the contributors. Citigroup also wrote ‘recommendations’ that appeared to be reflected almost word for word in the final draft of H.R.992. The Citigroup recommendations reads:

(d) Only bona fide hedging and traditional bank activities permitted. The prohibition in subsection (a) shall apply to any covered depository institution unless the covered depository institution limits its swap or security based swap activities to:
(1) Hedging and other similar risk mitigating activities directly related to the covered depository institution’s activities.
(2) Acting as a swaps entity for swaps or security-based swaps that are structured finance swaps, unless–
(i) such structured finance swap is undertaken for hedging or risk management purposes; or
(ii) each asset-backed security underlying such structured finance is of a credit quality and of a type or category with respect to which the prudential regulators have jointly adopted rules authorizing swap or security-based swap activity by covered depository institutions.

– Unsurprisingly, given just how much money Wall Street has spent buying its Congressional support for the Bill, H.R.992 reads:

(A) Hedging and other similar risk mitigation activities.
Hedging and other similar risk mitigating activities directly related to the covered depository institution’s activities.
(B) Non-structured finance swap activities.–
Acting as a swaps entity for swaps or security-based swaps other than a structured finance swap.
(C) Certain structured finance swap activities.
Acting as a swaps entity for swaps or security-based swaps that are structured finance swaps, if–
(i) such structured finance swaps are undertaken for hedging or risk management purposes; or
(ii) each asset-backed security underlying such structured finance swaps is of a credit quality and of a type or category with respect to which the prudential regulators have jointly adopted rules authorizing swap or security-based swap activity by covered depository institutions.

– Practically word for word. In fact, according to the New York Times, 70 of the 85 lines in the Bill were penned by Citigroup. A Bill that deregulates the risky aspects of the financial industry – and spreads the risk of failure and the obscene costs of such, to the taxpayer if it all collapses again – was written by the financial industry. Welcome to the House of Wall Street.

The Bill passed the House, and was referred to the Senate Committee on Banking, Housing, and Urban Affairs at the end of October. It is unlikely to pass the Senate, though if somehow it does, it is unlikely to be signed by the President. The White House has already registered its opposition to the Bill, though stopping short of threatening a veto. It might be worth noting that Jack Lew – current Treasury Secretary – worked as Citigroup’s Chief Operating Officer between 2006 and 2008, overseeing the Alternative Investments unit that invested in a hedge fund that had bet on the housing market to collapse.

The US is still recovering from the destruction wrought by, among others; Citigroup. In 2013, Citigroup and Wall Street have successfully managed to lobby Congress into ensuring that incredibly risky derivatives deals – that helped to cause the problems in the first place – are now fully exposed to a risk of a future bailout. This, despite the Federal Reserve reporting in 2012 that Citigroup was one of four financial institutions to fail its ‘stress test’; a test of the institutions ability to withstand another crisis like that of 2008. Also in 2012, Citigroup had to settle an investor lawsuit for $25,000,000 for allegedly misleading investors over the nature of its mortgage-backed securities. Why on earth is this institution allowed anywhere near the strings of government, to shape policy that has such far reaching implications?

Under such circumstances, Citigroup’s lobbyists must be in for a huge Christmas bonus. They’ve certainly earned it.


The nature of “Change”

May 9, 2010

It amazes me that people actually consider any party; Labour, Tory, or Lib Dem of being the “party of change”. Absolutely unreal to believe that. I voted Liberal Democrat, almost in a moment of madness. I suppose I got caught up in the excitement of the election. It amuses me how many fellow students actually believe they were voting for “change” for the Liberal Democrats. It makes me feel like banging my head against a wall. The same feeling I get when people say “Well Gordon Brown caused this mess, so the Tories have to fix it!!!“. I am actually quite ashamed of myself for voting. I agree with the Lib Dem policy on Trident, and I agree with them on laying the foundations for a Greener economy. I disagree, profoundly with them and the Tories and Labour, on pretty much everything else. But my main issue with them, and my main issue with why they offer no real change, is because they still seem to believe that democracy is only acceptable in the Political sphere, and that the economic sphere is best left to faceless businessmen, as if they know what’s best for the World and the rest of us should just accept it.

Why was financial reform not at the top of the agenda? Why did centre-left and left wing parties allow the political discourse to become one of the necessity of savage public spending cuts? Why did centre-left and left wing parties allow the discourse to suggest that it is the public sector that is to blame, that government spending is to blame for the deficit? It is because they are not centre-left or left wing parties, they are parties for the rich, by the rich. The Lib Dems offer no real change. They offer the status quo, and the status quo is centre-right.

Financial deregulation was started by the Conservatives in the 1980s. It continued under Labour. The Liberal Democrats did not oppose it. The Liberal Democrats have no plans to reverse it. What they have basically been telling us for thirty years, is that government spending distorts the market by artificially affecting the demand side of the economy, whereas a bank offering easy imaginary money to stimulate our obsession with debt fuelled consumerism, is perfectly acceptable. They decided that it’s okay for a bank to use our money and our savings, not to invest in productive enterprises that progress mankind, but in totally non-productive speculative gambling and massive monopolising corporate take overs and mergers.

The very people who got us into the mess over in the private financial sector, are the same people who finance the parties across the World who are now not offering any kind of financial reform to stop them doing it again. A global banking transaction tax is surely only going to end up being passed onto consumers? The financial industry holds us all to ransom. When we hear them say that capital will flow out of the country, and cause investment to drop, if tax is put up……. they’re right. A lot of people dispute it. But they are correct. You almost have to bribe them to try and get them to stay in the Country. Bribing with political power, is usually the way it’s done. If you look at Latin America, what tends to happen when a Latin American government tries to invest in social justice, and attempts to help it’s people through a better standard of schooling and health, is that either America funds a right winged coup (see Nicaragua), or capital flows out of the country, which is then brought to it’s knees, and the Western World blames the evils of Socialism. When in reality, what is happening, is that slowly, politicians have less and less power, they have to give in to the owners of great wealth, otherwise capital flows out, and investment falls. The economic sphere, has the most power, and we have no say over that. Financial speculation has absolutely no social good. It is a cancer on the fabric of society. The financial industry, holds the World to ransom. And until the public have some control over the economic sphere, it is never going to change. The Lib Dems, certainly aren’t going to change it.

If you think through the logic of this, you’ll see that so long as economic power remains privately concentrated, everybody...everybody…….. has to be committed to the one overriding goal: and that’s to make sure that the rich folks are happy.
Whenever a reform measure does come along somewhere, they have a big propaganda campaign against it saying ‘it’s going to hurt jobs, it’s going to hurt investment, it’s going to hurt business confidence and so on. That’s just a complicated way of saying unless you keep business happy, the population isn’t going to have anything.

– Professor Noam Chomsky

There are no left wing intellectuals left within the political system any more. Politics demands leaders of Parties who pander to the public mood, which is artificially created and implanted, by the media. Immigration is a great example. Migration is caused by global inequality, nothing else. When capital and goods are free to flow across the World, so will human beings. It is our survival instinct at work. And so the only real way you deal with immigration, is to deal with global inequality. Stop the IMF destroying poorer countries with ideological warfare. A global initiative to tackle exploitation. A Global bill of rights ensuring a minimal standard of living for all human beings. In the 21st Century, where it’s considered morally acceptable to allow someone to amass a fortune worth billions of pounds, it seems abhorrent that it is considered morally acceptable to allow another to starve to death as a result of nothing more than this nightmare of an economic system. A Global financial sector regulator that is fully independent of any private interest. To sum up, a Global initiative to create a socially responsible form of Capitalism, rather than a regressive Darwinian form of Capitalism we’ve all had forced down our throats. Global solutions, to Global problems. Politicians across the UK and the World, especially in the developed Nations, pander to idiots, bigots, and xenophobes who do not understand the World, and offer easy and quick Colonian-esque solutions to complex problems. The Lib Dems do not offer any change here either.

So, who do we vote for, for real change?