It says something for the value of London Underground’s Brand (the second most recognised in the UK) and which is also widely recognised internationally that TfL has allowed it to be devalued by having its New Year’s Eve Travel sponsored by an usurious short term loan company called Wonga. Set up by two South African ex-Investment Bankers and backed by three Vulture Capital funds Wonga has the air of a short term get rich quick scheme for all involved, except the unfortunate and vulnerable customers. Mindful of the opprobrium rightly heaped on usurious money lenders Wonga craves respectability and brand recognition by sponsoring the new boys in the Premier League Blackpool FC and now the London Underground Brand and New Year’s Eve in London has been hijacked by them in a disgraceful abdication of moral authority by a publicly owned and accountable transport system who, according to the posters on The Underground, are bringing you free New Year's Eve Travel "in partnership with Wonga.com."
The move has been criticised by London Mayoral challenger Ken Livingstone and Labour MP Stella Creasy, who called on Boris Johnson to step in and cancel the deal. She said: “Evidence tells us that the average level of debt amongst Londoners is rising, with many now facing unemployment in the New Year as well as struggling to make ends meet given the high cost of living here. I hope the Mayor will change his mind on taking their cash.”
Now sponsorship is hard to find particularly as previous sponsors are excluded by the “No Booze on the Tube” policy (Fosters, Bacardi) and bankers now longer sponsor (NatWest, ING Direct, Barclays) but should Bozza Johnson really be encouraging London's most desperate and needy to get themselves into even more debt over the Christmas period? And how does this tie in with the Conservative party's pledge to "tackle Britain’s' debt culture"?
CEO Errol Damelin (ed_wonga on Twitter) in his St. John's Wood office - they don't have much local business
2012 Labour Mayoral contender, Ken Livingstone has said;
"It’s hard to think of a clearer demonstration of the values of today’s Tory party than Boris Johnson’s decision to sell prime time advertising space on London’s buses and tubes to a loan company known for charging 2,689% APR. While millions enter Christmas and the New Year with concerns over their jobs and family finances, our Conservative Mayor is busy plastering the capital with adverts for loans companies who profit from increasing the debts of the poorest in society."
But Transport for London insists it will not tear up the sponsorship agreement with Wonga, which says its mission is “to solve people’s short term and urgent cash flow problem with an equally short term and responsible solution.” Wonga employs 37 staff at its St. John's Wood offices in London with a development team in the Ukraine, and is backed with venture capital from Balderton Capital, TAG and Kreos Capital.
Wonga on The Tube
They describe themselves as the providers of ‘fast, short-term loans online’ and promise to ‘deposit cash straight into your bank account within 15 minutes of approval, 24/7′. When their sponsorship deal with Blackpool FC was announced, ‘Wonga’ issued a toe curling Press release. “Everyone here is bouncing around with excitement and looking forward to the new footie season with even more excitement than usual,” it gushed. It quoted their founder and CEO, one Errol Damelin, as saying: ‘It’s sure to be a rollercoaster of a season and we can’t wait for the ride to begin.’ And it concluded: ‘C’mon The Seasiders!’
‘Wonga’ are a ‘payday loans’ company. They offer the poor and the desperate quick money at soaring rates to get them from one pay-day to another. Their annual percentage rate charged is 2,689 per cent, a fact which their literature goes to uncommon lengths to explain away. Last month, in the same week as the Blackpool sponsorship was announced, the Advertising Standards Authority – acting on 63 complaints – found them guilty of two breaches of the TV Advertising Standards Code and warned them about future examples of misleading advertising.
Complainants claimed that the light-hearted presentation of the ad was likely to "mislead vulnerable viewers" about the nature and implications of the product, and also challenged whether the presentation of APR complied with the consumer credit regulations. In the ad, a man stated that he needed to borrow £70, and ridicules the idea of going to a high street bank, with laughter heard in the background.
Wonga.com: TV ad banned by the ASA
An ASA spokesman said: "We considered that the tone of the ad, which included light hearted background music, colourful imagery, laughter related to the concept of obtaining a loan from a bank, a seemingly casual conversation and a character that wore a split costume and had half a beard gave the general impression that the service offered was a trivial one that could be considered in a light hearted manner.
Wonga admitted it had breached consumer credit regulations, as the typical ARP should have been displayed with greater prominence than the on-screen message "£70 for 5 days = £9.22. Total repayable £79.22".
Wonga: slang term for cash or money, used in the UK and especially in London (“A whole lotta wonga”). From the Romany word wanger (coal) - coal was sometimes used as a casual term for money in England in the 18th and 19th centuries.
Boris Wonga Johnson
Boris himself has never been short of Wonga, he grew up in The “Pink House” on Primrose Hill which is currently on the market for £5.25 million if you want to give your kids a Boris childhood, went to Eton and Oxford where David Cameron described his best buddy’s fun personality speaking in 1986;
“Things got out of hand & we’d had a few drinks. We smashed the place up and Boris set fire to the toilets.”
These are the people who recently condemned the student protests in London, no doubt greatly assisted by a short memory. As well as his Mayoral salary and expenses Boris gets £250,000 a year for a weekly column in the Daily Torygraph which, considering the variable quality of his output, must be considered a political subsidy. Boris will not be in London on New Year’s Eve, he, his much put upon wife Marina Wheeler and their four children are on a Major Wonga Grand Tour of India.
A week ago Boris was on LBC radio station with James O'Brien where he seemed mighty confused about the issue saying that Wonga's interest rates were "extortionate" whilst claiming that it was "perfectly acceptable" for him to promote them:
O'Brien – There is concern about your choice of Wonga as a key sponsor for TFL over Christmas and New Year. Ken Livingstone has had his abacus out and has calculated a 2689% APR rate on their loans and he suggests it is not very wise of you are selling their advertising on the buses and tubes?’
Boris – Well there are legitimate outfit and they are licensed to trade in this city, and if they want to sponsor, reduce cost of travel in London then that seems to me to be something that is perfectly acceptable. But what I would say and I would stress this, people should be aware of the extortionate rates of interest that they can charge and people should not enter into irrational or unwise debt obligations...
O'Brien– But you appreciate seeing it on side of bus or tube can actually camouflage what you have just described as extortion?
Boris – Well as I have said I think it is very important that people are aware of the massive downside of getting exposed to debt on this scale and I will lose no opportunity to make that point...
Green Party Assembly Member Jenny Jones said:
"The Mayor of London must understand promoting 2,689% borrowing is stupid and dangerous. Reducing public debt, by promoting private debt is irresponsible politics. We live in an age where personal debt is an all time high and it is the money men who are profiteering from the excess. This is giving a platform to a loan company just as Londoners are hit by the January blues, when bills arrive and cash is short."
Wonga claims it is different and responsible but this contribution on Martin Lewis' Moneysavingexpert.com seems to suggest otherwise;
“Wonder if anyone can give me some advice please.....!!
I took out a Payday Advance with Wonga for an amount of £405.50 in December 2008. Much to my surprise I was then made unemployed due to the recent credit crunch crisis and laid off in January 2009.
I advised Wonga of this and was able to come to a payment arrangement of £10 per week for one month and then I was to call back and speak to the same adviser to see if my circumstances had changed. However they never even attempted to take to the money from my account and then when I did telephone again the adviser I spoke to was someone different and was extremely rude and un helpful.
I then wrote to Wonga complaining of this adviser and also explained my personal circumstances with supporting documentation to state that I was claiming benefits.
I then received a phone call from Wonga saying that I had not stuck to my agreement of the £10 per week and I explained that they have never even attempted to take it nor had they telephoned me or wrote to me to say they that they could not collect it!!!!!!! I was somewhat really confused. I asked if they had received my letter and she said she didn’t know!!! I then went on to Royal Mail and got the signature to say that the letter had been delivered which proves to me that they totally ignored it.
Anyway I now have received a letter through the door from Marston Group stating that I failed to respond to their previous request - but this is the first letter that have sent to me!!! And they are asking for an amount of £1015.18, that’s nearly another £500 on top of what I borrowed, they are also saying that if I do not respond within 5 days of receiving the letter they will be sending an enforcement officer to my door.
Please help someone!!!!!!
Thanks”
Usury has been rightly condemned over the ages for exploiting the poor and vulnerable. No addition of high tech gizmos will make Wonga and similar operations acceptable, not the financial backing of American Vulture Capital Funds looking for a quick buck, not the panting porno prose of press releases by PR Pharisees nor the get rich quick dreams of the spivvy wide boy Investment Bankers who thought up this wheeze and no doubt are contemplating the Chateau and vineyard in France by the time they are 40? Consider this; Wonga only lends up to £1,000 pounds to repeat customers for up to 31 days maximum – if they lent their typical loan of £262 for twelve 30 day periods they would have earned £1,008.72 in a year – some wheeze. If they must exist they should stop sponsoring Blackpool FC and “Free Travel” on New Year’s Eve and lower the interest charged to their needy customers.
As for New Year’s Eve travel in London Underground ticket offices will be closed from 23.45 to 4.30 so you don’t have the option of going up to them and saying “I’d like to buy a ticket as I don’t want to exploit the poor and needy on New Year’s Eve.” So who will sponsor NYE next year, maybe “Cash for Gold”,"Foxy Bingo" or the Colombian Cartel with a strapline “Please use our products responsibly” – can’t see anybody too respectable being interested now the brand has been so rubbished?
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