Labour MPs have increased the pressure on payday lenders Wonga to quit their Newcastle United shirt sponsorship deal – but the company say they are committed to the club.
The finance firm’s new chairman Andy Haste announced on Monday he would be reviewing the company’s advertising and marketing “to make sure that we don’t leave any impression that we are trying to influence or target the very young”.
But with thousands of junior Magpies fans wearing Wonga-sponsored shirts, some MPs said they hope he will end to Wonga’s partnership with NUFC.
A spokesman for Wonga said that its chairman had been asked a comment about Wonga’s marketing in general in the wake of the company’s decision to ditch its “puppet” advertising campaign, and had made no specific remarks regarding Newcastle United.
“We continue to be proud sponsors of Newcastle United FC,” she said. “Our new chairman, Andy Haste, was commenting on our general marketing approach – he did not make any direct comment on our sponsorship of the club.”
Gateshead Mp Ian Mearns said: “If Wonga express an interest in disassociating themselves because of a duty to young fans in their new business model then I’d hope Mike Ashley would let them out of their contract and find a new sponsor.
“But it will depend on what Wonga are contractually obliged to do in terms of the longevity of their sponsorship deal.
“It might be very difficult to extricate themselves from it.”
Newcastle Central MP Chi Onwurah said the possibility of Wonga continuing as sponsor would be in direct contradiction of its vow not to target children.
She said: “The idea that Wonga is not targeting children when its logo is emblazoned across toddlers throughout Tyneside would be laughable were it not so serious,” she said.
“I look forward to a day when Newcastle United’s sponsors are not a source of shame for so many fans, until then I will not be attending matches at the stadium.”
One the issue of the ground re-naming, MPs refused to be drawn.
Wonga paid club owner Mike Ashley to “return” the ground’s name to St James’ Park in October 2012 after he had named it the Sports Direct Arena after his sports shop empire.
But Ms Onwurah refused to be grateful for the move.
She said: “I am not grateful to Wonga for retaining the name St James Park. Mike Ashley should never have changed it to Sports Direct in the first place.”
However, Mr Mearns welcomed the new Wonga chairman’s admission that in the past it has made “some serious mistakes” and his desire for the company to operate in a “responsible and transparent manner.”
“I very much welcomed the comments from Wonga and I think some of that comes from a realisation by them that hopefully there will be much more stringent regulation from the FCA,” he said. “They’re waking up and smelling the coffee and taking a realistic attitude.”
Source – Newcastle Evening Chronicle, 15 July 2014
Council leaders in South Tyneside are being asked to launch a crusade against high-interest rate lenders.
The move comes as the Citizens Advice Bureau in South Shields says the number of people approaching it with debts resulting from payday loans has doubled in the last two years and the average amount owed is £1,610.
A motion, to go before a full meeting of South Tyneside Council council later this week, calls for a series of measures to clampdown on lenders like Wonga, The Money Shop, Quickquid and Payday UK.
The recommendations are:
* Blocking access to loan company websites from council-owned computers.
* Issuing public warnings about the dangers of payday lenders.
* Work with partners to stop lenders locating in South Tyneside and prevent them promoting their businesses in the borough.
* Try to get licensing powers extended to limit the expansion of lenders in the borough.
* Provide debt advice to people affected by lenders.
* Promote the Bridge Community Bank in South Shields as an alternative lender.
> If it’s any incentive, I’ve got an account with The Bridge !
The Money Shop, which has an outlet in Fowler Street, South Shields, offers an annual interest rate of 390.94 per cent and an annual percentage rate – the rate for a payment period, multiplied by the number of payment periods in a year – of 2,962 per cent.
Anyone taking out a £200 loan would face repaying – in a single payment, within 28 days – £259.98.
Coun Allan West, the council’s lead member for adult social care and support services, is a signatary to the motion, and says he is concerned that the most vulnerable people in the borough are falling foul of the lenders.
He said: “It is easy to understand the financial pressures that lead people to rely on payday lenders, but their excessive interest rates mean there is a real risk of a short-term financial issue turning into a long-term spiral of increasing debt and interest payments. A national cap on the cost of lending would go a long way towards protecting some of our most vulnerable citizens from the dangers of payday lending.”
He added: “In the meantime there is a lot we can do locally, by letting people know about options like The Bridges Community Bank, which offers much lower rates, as well as keeping money in the local economy.
“I would encourage anyone who has financial problems or concerns about the Government’s changes to the welfare system to contact the council’s welfare rights service on 424 6040.”
The full council meets at South Shields Town Hall at 6pm on Thursday.
Payday lending firms have become a major political issue in recent years.
Many councils already block access to lenders’ websites from libraries and other public buildings and South Shields MP Emma Lewell-Buck, last year, signed a national charter – supported by some of Britain’s biggest debt, consumer and anti-poverty organisations, including Which?, Citizens Advice, StepChange Debt Charity and Church Action on Poverty – calling for tougher regulation of payday lenders.
In October 2012, Newcastle United sparked a storm when the club announced a four-year sponsorship deal with Wonga.com.
The payday loan company now has its name on the club’s shirts.
Wansbeck MP Ian Lavery labelled the company “morally bankrupt” on social networking site Twitter.
Before the start of this season, the club’s star striker, Papiss Cisse, said he would not wear the club shirt bearing a Wonga logo on religious grounds, but the row was resolved in time for the club’s warm-up match against St Mirren.
Source – Shields Gazette, 11 March 2014