Media reports that the head of the CofE (Church of England) - Justin Welby - intends to buy Wonga’s loan book highlights a shameful PR stunt that is a symbol of all that is wrong with the virtue signalling class. In fact this is an all time low even for them.
For one, and why no journalist has picked up on it is that the Church of England doesn’t even have an FCA license to buy a loan book. For god sake, just how big of a flashing light do they need before realising this is a “PR STUNT” by Welby. The media and vacuous do-gooders being misled again. Remember this is someone whose job it is each week to convince the masses of fake mythical characters to collect money each week. One would say that the warning signs are there.
The background is simple. Justin Welby is the Archbishop of Canterbury. He’s often voiced concerns about companies like Wonga. He once said he wanted to compete them out of business because of their extortionate rates that they charged the poor. All whilst wearing a giant gold hat, paid for by the poor. Sometimes you couldn’t make it up.
Anyway, as we all know Wonga collapsed recently and Welby seems to be taken some sort of credit for that despite never actually building any entity to compete with Wonga. Whatever he believes, there is no evidence for any of his claims that anything he ever did hurt Wonga in any way. What killed Wonga were claims management companies and Welby wasn’t linked to any of them.
The Loan Book
With Wonga collapsing, the administrators’ task is to sell off the assets to pay back the people that Wonga owed money to. They may sell everything to one buyer or they may break up the assets. One of those assets would be the loan book. Wonga's loan book is huge at an estimated £400million in money owed to them.
The loan book is basically a book – in modern times it’s most likely a database - of people that owe Wonga money. The debts owed to Wonga by these customers could be worth a lot of money to some. Usually, they would pay up to 30p in the pound to purchase the loan book. If Wonga had a loan book worth £1m. Someone would buy it from the administrators for about £300,000 and try to collect as much as possible. If they manage to collect all £1m then they have made a profit. If they only collect £100,000 then they have made a loss.
In a very basic way, that is how it works. It’s a sort of a gamble by those buying the book.
The reason they only pay about 30p in the £1 and not the full £1 is that a lot of this debt will be bad debt and unlikely to ever be repaid. Wonga’s loan book isn’t too bad so it might sell for about 35p.
The point of this story
Labour MP Frank Field, someone we have a lot of respect for suggested that Welby and the Church of England step in to purchase the loan book from Wonga’s administrators. His reasoning is that it would stop the loan book falling into the hands of a group that would be more vigorous in chasing the debts with all the higher costs that would bring for the borrower. His reasoning is sound and is founded in logic.
Justin Welby has made known his willingness to do this known to the media. On the face of it, this will be something that the people who owe Wonga money might take comfort from, especially if they have defaults with their Wonga account.
Problems for the Church of England
These problems mean that there is no way of this earth that the Church of England won’t be touching the loan book with a barge pole.
First of all, they don’t have any sort of license to run a loan book. From our knowledge of the FCA’s procedures, it will be at least 10 weeks away. With all the Due diligence that the CofE’s legal team will do you can rest assured that it would take about 20-26 weeks for them to actually be in a position to do anything and Welby must know this. He must also know that the administrators need to sell this loan book off fast, probably within the next 2-3 weeks because debtors will be dying off, going bankrupt etc. Every day that passes, the loan book becomes less valuable.
The biggest reason why the CofE is not going to buy the book is that of reputational damage. There is literally no chance at all they will get into this market. As the saying goes, no good deed will go unpunished. Even if Welby and the CofE let people pay back the loans at £1 a week and with no interest, some would still complain and not make repayments.
In some ways we would love to see them buy it, it would make our day. At least then they could see what type of borrower is out there. The borrower who has no money to repay a loan but has enough for a flashy new TV and 40 cigs a day.
Please someone film Welby going to collect from these people, please!
What is the CofE going to do when debtors tell them to take a running jump when it comes to making repayments? Is the CofE going to have a team of nuns on the phone lines collecting debts?
Of course, it is farcical, we all know this and that is why we know that Welby is making fools out of the media and do-gooders in exchange for some virtue credits. He should be ashamed, but a small part of us admire him for making a fool out of them.