Bolton Wanderers’ decision to sign a sponsorship deal with payday loan company QuickQuid has been blasted by Labour MP Julie Hilling.
Ms Hilling, who is MP for Bolton West has slammed the Championship club after it revealed the firm’s logo would feature on the kit for the next two years.
She described the announcement as ‘a very sad day’ for Bolton Wanderer’s Football Club, for the borough of Bolton and the wider community, adding that as a family club the agreement to pair up with a payday loancompany was ‘wrong’.
“It legitimises such companies where as the reality is that they are little more than legalised loan sharks charging exorbitant interest rates,” Ms Hilling said.
The Bolton West MP explained that while QuickQuid, a website which advertises fast delivery of cash within ten minutes of approval, does show repayment rates – with annual interest charges of 1734% – it fails to make clear what will happen if people are unable to pay back their loans.
“It doesn’t show how a loan of a few hundred pounds can result in you owing many thousands of pounds,” she added.
“At this time of cuts, high unemployment and ever increasing prices, we know that many people are already struggling with their finances, finding it difficult to keep a roof over their heads and feed themselves and their families,” Ms Hilling said.
She explained that many low-income families can quickly become reliant on payday loan companies in order to survive.
“Our football club should not be giving the impression that it is alright to go to these companies and should, if anything, be directing them to low cost alternatives like credit unions,” Ms Hilling added.
Bolton residents in particular are being faced with council tax increases of 3.5% for 2013 to plug a budget gap of £43million over the next two years.
This comes after council tax rates were frozen in 2011 and 2012 and could add an extra £49.41 for those living in a Band D property and £32.94 a year for people in Band A.
The borough also has some of the highest rates of child poverty, with 39% of youngsters in the wards of Farnworth and Halliwell classed as living below the poverty line, according to a report from the Campaign to End Child Poverty last year.
Earlier this month the payday loan industry was heavily criticised by the Office of Fair Trading for ‘widespread irresponsible lending’ and exploiting those in vulnerable financial situations.
Margaret Hodge, head of the Commons Public Accounts Committee (PAC) said that payday lenders were milking British people for £450 million a year while the OFT ‘passively waits’ for complaints before taking any action.
A PAC report accused the OFT of lacking basic information about payday lenders and failing to invest enough in regulation.
It also said the watchdog had never fined a firm for malpractice, was too slow to revoke creditlicences and failed to stop unscrupulous companies trading under alternative aliases.
The OFT also urged confusing APR rates of up to 4,200% to be replaced by clearer repayment cost notes.
The PAC did however welcome efforts made by the OFT in March to give 50 lenders 12 weeks to reform or risk banning orders.
In turn the OFT has responded to the report insisting that it has banned some of the industry’s largest firms.
An OFT spokesman said: “Far from being timid, we have taken strong action.”
While the debate over regulation continues, according to one study the number of payday lenders and betting shops have risen in the UK by 17% per cent over the last year.
With these increases this makes the industry more difficult to police, with many consumers witnessing their debts spiralling out of control due to unclear repayment costs or from borrowing unsustainable sums of money.
Research carried out by the Bolton Debt Free Helpline shows that the number of bankruptciesin the city has increased by 25% over the last year, 5% higher than the UK average.
Debts in low income households are being incurred to meet subsistence needs, while higher income households are taking out larger mortgage payments in order to cope with spiralling debts.
For those struggling financially, Bolton has many free sources of support and advice on offer to residents.
Bolton Council runs a Money Skills Service which helps local people to take control of their finances, deal with debt and balance their budgets.
This confidential and impartial scheme can be accessed individually or through accredited workshops.
Alternatively the Bolton Citizen’s Advice Bureau can advise on debt and how to take action through negotiating with creditors, representations at county court hearings and budget planning.
With many people in the city facing debt problems, Ms Hilling believes that Bolton Wanderers’ decision to advertise the use of payday lenders is irresponsible.
She added: “Loyal supporters are crucial to Bolton Wanderers, they are the people that buy the tickets and the merchandise.
“They also know the effect this sponsorship deal could have on the community and so the club should pay heed their views.
“We need Bolton Wanders Football Club to be strong successful, we want them to get back into the Premiership and I, with the fans, want the company to rethink and not go ahead with this sponsorship deal.”
Picture courtesy of Henry…, with thanks.
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