Medway Labour are deeply concerned by the news that a research project to look at the personal finances of Medway residents, led by Medway’s Citizen’s Advice Bureau (CAB), is to be funded by Wonga.
Wonga are a money-lending company famous for their excessive charges, levying interest rates of up to 4,214% APR, known to trap vulnerable individuals into spirals of personal debt. However, part of their success is that Wonga utilise aggressive marketing tactics to mask the reality of this less palatable aspect of their product.
They have been criticised across party lines, as well as by third sector organisations dealing first hand with the fall-out from Britain’s personal debt crisis, including the CAB themselves.
Cllr Vince Maple, Leader of Medway Labour Group, has fought a longstanding campaign to raise awareness about the growing problem of Legal Loan Sharks. This included getting the Council to agree, on a cross-party basis, to an ‘End Legal Loan Sharks’ motion which has culminated in a Council task group specifically to look into the issue.
Cllr Maple said; “The concept of undertaking this research for Medway is a positive thing, however, Wonga’s involvement in this is a gross error of judgement. I strongly question Wonga’s motives.
“Wonga are one of a number of payday lenders who continue to charge crippling levels of interest on their credit; with a business model based on people getting into debt. They market their product aggressively, often to the most needy and least able to pay back what they borrow; to people without any income at all, including students.
“They have no place being involved in project of this nature. If this research is to make a truly valuable contribution, it must be funded by alternate means. Otherwise, Wonga’s involvement risks delegitimising the whole project and undermining the validity of the research findings.
“Perhaps our three local MP’s could make approaches to have this funded independently by the Government’s Business, Innovation and Skills department, rather than by an organisation with a clear commercial interest in the outcomes.”Other news from Medway Labour