Chi fears impact of possible NUFC sponsorship on struggling families

As Wonga announced it intends to sponsor Newcastle United, local MP Chi Onwurah has expressed concern about the promoting of legal loan sharking in football.

Chi is calling on concerned fans to join the campaign urging clubs to refuse to work with these companies until the Government introduces a cap on the costs of credit and a real time register.

Chi said:

“I had hoped that Wonga would stay away from St. James’ Park. Many Newcastle fans’ finances are already stretched to the limit by cuts, unemployment and high fuel costs. This would be like Ba saying ‘get a payday loan’. Whilst every other industry suffered from the recession, this legal loan shark made £45m in pure profit because of the poor regulation of these firms in the UK. It’s not the sort of economic growth we need in Britain given the debt and misery these companies are causing to many.

“Until this industry is properly regulated their sponsorship money is not welcome in the game and we want everyone to refuse to work with them until Britain has caps on the charges these companies can levy.”

The Government is refusing to act to ban legal loan-sharking. APR for payday lenders can begin at 444% and can escalate to 16,500% or more. Four million people are expected to take out a payday loan in the next six months alone. 

The campaign is also calling on the Football Association to extend their ban on alcohol and gambling advertising on merchandise for under-18s to include payday loan companies.

Notes:

            Wonga’s earnings after tax increased from £12.4m to £45.8m in 2011 – with revenues of £184.7m. Wonga provided almost 2.5 million loans last year, which was four times the number it did in 2010.
            The FA currently has a ban on alcohol and gambling advertisements on merchandise for under-18s “to protect the welfare, health and general well being of young people.”
            Last year the payday loan sector in Britain was worth £1.7bn, a fivefold increase in the last few years. Research by R3 predicts nearly 4 million people will take out a payday loan in the next six months alone. The APR for payday lenders can begin at 444% and can escalate to 16,500% or more. And home credit lenders, who make home visits in order to collect repayments for their short-term loans, can charge £82 in interest and collection charges for every £100 lent.
            Some 11% of lone parent households use “non-mainstream” (ie payday, home credit or pawnbroking) loans, compared to 3% of households overall.
            One in ten UK payday customers have incomes of less than £11,100 per year and 46% have incomes of less than £15,500 a year.
            WHICH? research shows that a quarter of those who have taken out loans with payday lenders have been fit with hidden charges such as high fees for reminder letters, and one in five were not able to pay back their loan on time.
            The same research by WHICH? shows that 57% of those taking out a payday lender loan are being encouraged to take out further loans – and 45% rolling over their loans at least once.
            A third of people with payday lending loans were bombarded with unsolicited calls, texts and emails before they had even signed an agreement.
            Research by WHICH? Showed that over 60% of people who took out payday loans were using the money to pay for household bills or buying other essentials like food, nappies and petrol.
            Payplan, a debt charity company, says that 47% of its clients had six or more payday loans in the last year alone. More than half of the people going to Payplan for debt advice owed more than £500 to these companies, and 61% had more than one at a time. Most crucially, 86% of its clients were using the loans for basics—food, transport and the basic costs of everyday living, not luxuries.
            The Red Card for Wonga campaign is part of Sharkstoppers- a coalition of campaigners across the UK seeking to cap the costs of credit and bring in a real time register for credit. They have been campaigning at football grounds across the country to urge football clubs to refuse to work with legal loan sharks until the industry is properly regulated.
            Stella Creasy MP began the Sharkstoppers campaign when she was elected in 2010 and has been seeking to table legislation to cap the costs of credit. At present the Government has refused to back these measures.

For more information on action being taken in Newcastle contacted Chi Onwurah MP on 020 7219 7114.

More details on Stella Creasy’s campaign to tackle legal loan sharking in the UK is available on her website www.workingforwalthamstow.org.uk ; or call 020 8521 1223. 

 

 

Written by

Chi's Parliamentary Researcher. Contact: simmondsma@parliament.uk or 020 7219 7114

No Comments Yet.

Leave a Reply

Message

WordPress SEO fine-tune by Meta SEO Pack from Poradnik Webmastera