Do payday lenders deserve the criticism they receive?

In light of the occasional criticisms that have come your way over the years, do you think that payday lenders deserve the kicking they are currently getting?

Or do you feel that yet again a middle-class media, supported by feather-bedded politicians, pious church leaders and self-righteous consumer groups, are whingeing too loudly? Are payday lenders simply responding to a need – an unquenchable thirst among the young and old for short-term credit?

I raise these questions because they are ones that have been niggling away at me for the past few weeks – and, for that matter, at many of my friends, some of who, incidentally, are upstanding and outstanding financial planners, and others with relatives who regularly use payday lenders to tide them over.

Is it really right that Wonga, the leading and most successful exponent of payday lending, gets a regular pasting even though more than 90 per cent of its 1.25m customers are perfectly satisfied with the service they get from the company?

And is it justified that rarely a week goes by without some payday heavyweight being hauled before some parliamentary committee or TV camera to defend the industry they work for? Or should we just leave payday lenders alone to provide a much-needed financial service? Questions, yet more questions.

In fact such questions drew me earlier this month to the Curzon Soho, an oasis of cinematic delight in London’s West End, more noted for its theatres, Chinese restaurants and medicinal shops offering everything from instant back pain relief through to cures for erectile dysfunction.

The attraction was the premiere of 12 Portraits, a short film (not a second more than 28 minutes) commissioned by Wonga to dispel some of the myths surrounding its practices.

I really did not know what to expect as I plunged into the cinema’s basement with my bag of popcorn and extra large Coca Cola to watch the film. All I knew was that it had been put together by Gary Tarn, a Bafta-nominated film director and composer whose films included Black Sun, The Prophet and The Possibility of Hope.

I was somewhat disappointed. What I thought would be a sickly advert for Wonga (I had brought an easyJet sick bag just in case the film turned my stomach) was anything but.

What I thought would be a sickly advert for Wonga was anything but.

Instead what we saw as we sat back and crunched through our boxes of non-calorific popcorn was Mr Tarn giving us a glimpse of the lives of 12 very ordinary people, including an overseas student, an aspiring musician, a doting mother, a children’s hairdresser and a budding photographer (I always wanted to be one of those).

It was all very anodyne, all very nice and, frankly, all very boring. If it had gone on any longer my head would have plunged into the depths of my remaining Coca Cola and the RNLI boat at Tower Bridge would have had to be called out to save me from drowning.

As far as the film went, Wonga simply did not get a look in. Not one of the dozen portraits said a word about the company – good or bad. We were simply given no insight into how Wonga had impacted on the lives of these perfectly nice people. Not a single sentence on how much each of the film’s stars and starlets had borrowed, when they paid it back and the overall cost of their borrowing.

In the Q&A session afterwards with a rather stony-faced and moody Mr Tarn, Niall Wass, Wonga’s chief operating officer, described the film as “beautifully made”. Dead right.

He also said the film got across the “views of the silent majority” of its customers that are never expressed in the media. Dead wrong.

More interestingly, he admitted the premiere was the first time he had seen the fruits of Mr Tarn’s hard labour. I suspect he did not really expect to be presented with 28 minutes of outstanding film making that took us no further down the road in terms of understanding the slick and successful business that is Wonga.

In fact the film only works if you switch on your laptop and visit Wonga’ s website. There you get some detail on how much each of the 12 portraits borrowed and how much they paid back.

Love or hate them, payday lenders such as Wonga are a by-product of a post-financial crisis Britain. They have stepped into a consumer lending void created by Britain’s banks and they are here to stay. What we now need is a brave regulator in the shape of the FCA to knock the industry into shape.

First on the agenda should be a cap on the interest that the likes of Wonga are allowed to charge (a representative annual percentage rate of 5853 per cent is shown on Wonga’s website).

I am sure all 12 Wonga portraits would welcome that – the premise, surely, for 12 Portraits II.

Agree? Disagree? Let me know.

Jeff Prestridge is personal finance editor of the Mail on Sunday