Debt warning issued over Transport for London ‘legal loan shark’ sponsor

A payday loans provider that has just clinched a deal to sponsor Transport for London‘s services on New Year’s Eve has been embroiled in a political row amid concerns over the debt their charges can leave people facing.

Londoners and visitors to the capital will be able to enjoy free public transport on New Year’s Eve due to the sponsorship of Wonga, but the firm’s 2,689 per cent interest rate has led to the capital’s Mayor Boris Johnson coming under fire for giving it publicity.

Former mayor and Labour candidate for the next election for the post Ken Livingstone accused Mr Johnson of “plastering the capital with adverts for loans companies who profit from increasing the debts of the poorest in society”.

And London assembly member Jenette Arnold commented: “These legal loan sharks prey on the vulnerable and have no place in our city.”

Mayorwatch published a transcript of an LBC radio interview with the mayor in which he defended his decision, but admitted there is a major risk of people encountering severe debt management problems with them.

“People should be aware of the extortionate rates of interest that they can charge,” Mr Johnson remarked.

Those looking for a loan may do well to seek advice on the best options, particularly if their need is based on having existing debts they need to pay off.

Wonga has had a higher profile this year, having launched a series of TV adverts for its services.

It is also the sponsor of Blackpool Football Club, which was promoted to the Premiership in May and whose shirts bear the brand’s name as the club plays in front of crowds of thousands and TV audiences of millions.

By Amy White