Wonga Sponsor No Worse Than Broon Ale?

13 October 2012 12:18
Wonga has taken stick from MPs and God knows who else for buying out the sponsorship deal at St James' Park.

But . one Newcastle United supporter suggests: "There's nowt wrong with Wonga. What about when they had the blue star? Nobody went on about people being alcoholics."

The Labour MP Ian Lavery will not set foot in Newcastle United's ground if Wonga's sponsorship of the team goes ahead, while the (Labour) leader of the council, Nick Forbes, said that the loans company shouldn't be allowed to make such a deal unless it ploughed some of its money into the city's debt advice services.

"Don't go to Wonga" would be a central plank of that advice – they could just cut out the middleman and put "Wonga – Don't Call Us" on the strip. I'm sure we'd all appreciate the irony, and the people who really needed a loan would call them anyway.

Their perceived misdeed is in the interest rate, which is astronomical – 4,214% APR – and the sense that they target people whom mainstream finance wouldn't lend to, because they'd struggle to pay it back.

And their answer: those people still need finance, especially since they're excluded from "respectable" finance, and it's often cheaper to go to Wonga than it is to have an unarranged overdraft with a high street bank.

One argument they haven't made – because they couldn't – is that the city of Newcastle might not notice who the sponsor was. It is really marked how many people wear the strip even on non-match days; I've never seen such a high density of people walking round advertising the same defunct building society.

"I don't know why they couldn't just stick with Virgin Money," said Zufar Rehman, a club supporter and taxi driver. "I wouldn't be wearing a shirt with Wonga on it, that's for sure." This is a bit of a refrain. "I just think it should be left as Virgin Money," said John, standing outside Newcastle Labour Club. "It'll change, there'll be a new strip, all the kids will want them, it's all money, money, money."

His friend, also called John, said mordantly: "It's always the same, everybody has a go at the toon," but added controversially, "There's nowt wrong with Wonga. What about when they had the blue star? Nobody went on about people being alcoholics." (Newcastle Brown Ale sponsored the team between 1995 and 2000).

That's the problem: when you look at Wonga compared with Northern Rock, dispenser of 125% mortgages, who's to say which business model set out to be the most exploitative?

Wonga advertise, but could you say they were any more aggressive than Virgin Money, who encourage greater borrowing on their credit cards remorselessly?

An unarranged overdraft with a high street bank can be more expensive than a Wonga loan. It varies from bank to bank, but that's a moot point because you probably won't be able to check: in January a Which? report asked volunteers to figure out the APRs on unarranged loans from four bank statements – between them, they only got seven out of 48 right. One volunteer had a PhD in maths.