Fri, 22 October 2021

Newsletter sign-up

Subscribe now
The House Live All
Environment
Energy
Brexit
Press releases

Anger at Wonga's 'vulture capitalism'

Anger at Wonga's 'vulture capitalism'

Unite | Unite

2 min read Partner content

The country's biggest trade union has accused payday loan company Wonga of preying on the financially vulnerable.

Today the company announced profits of more than £1 million a week.

Wonga, which offers short-term loans to more than a million customers, said profits after tax rose 35% to £62.5 million during 2012 - the equivalent to more than £1 million a week. It lent £1.2 billion in the year, a rise of 68%.

The Uniteunion said it is "angry that much of the so-called economic recovery and boost in consumer spending is being fuelled by payday lenders".

Unitegeneral secretary Len McCluskey said: “The fact that Wonga’s profits rose to £62.5 million in 2012 urgently reinforces the need for legislation to curb payday lenders and also for a Treasury select committee probe into this industry.

"Ted Heath once spoke of the unacceptable face of capitalism – what we are seeing in 2013 is vulture capitalism, picking wallets and purses clean.

“We urgently need the legislation being promoted by MP Paul Blomfield - the High Cost Credit Bill - but thanks to Tory blocking tactics it has been delayed."

Blomfield’s bill aims to reduce prime time advertising of payday loans; require lenders to contribute towards debt advice and place a duty on the new Financial Conduct Association (FCA) to better use existing law to control bad lending and debt collection practices.

A survey of Unitemembers revealed that those using payday lenders are borrowing around £326 per month to get by, the equivalent of one week's wages.

Errol Damelin, Wonga founder and chief executive, said: "Access to practical and affordable sources of credit is a big issue for our society and Wonga is playing a part by lending responsibly, and at scale, to people who can generally afford to pay us back quickly."

PoliticsHome Newsletters

Get the inside track on what MPs and Peers are talking about. Sign up to The House's morning email for the latest insight and reaction from Parliamentarians, policy-makers and organisations.

Read the most recent article written by Unite - Unite responses to Consultations

Associated Organisation
Podcast
Engineering a Better World

Can technology deliver a better society? In a new podcast series from the heart of Westminster, The House magazine and the IET discuss with parliamentarians and industry experts how technology and engineering can provide policy solutions to our changing world.

New episode - Listen now

Partner content
Connecting Communities

Connecting Communities is an initiative aimed at empowering and strengthening community ties across the UK. Launched in partnership with The National Lottery, it aims to promote dialogue and support Parliamentarians working to nurture a more connected society.

Find out more