Wonga deal with Football League ends

Updated: 

Blackpool shirtNigel French/EMPICS Sport

The websites of Premier and Football League clubs will no longer carry advertising for ultra-high-interest lender Wonga. A short-term deal had been in place from the end of 2011 to the end of the last football season, for the advert to be featured on a website platform used by more than 80 sides. That deal has formally concluded.

This has been welcomed by fans who have been campaigning for the company to be banned from advertising to supporters. But their fight continues.

The move

The Football League is at pains to point out that the adverts weren't 'dropped', but that the advertising deal with the company simply came to an end. They have since confirmed that the deal is unlikely to be extended, although the reasons why are unclear, and may have as much to do with response rates as any pressure from unhappy fans.


The controversy

Wonga remains a controversial business among many. It is one of 200 payday loans companies in the UK, which offer short-term loans at sky-high interest rates - several thousand percent interest rates are not unusual. They target the less well off, and there are concerns that those who cannot repay find themselves rolling loans over at huge cost, and facing enormous interest charges.

There has certainly been a fair amount of campaign activity from those who would like to see the payday lender dropped from sponsoring football. Back in March, fans of more than 20 football clubs wrote an open letter to the Guardian calling for a halt to Wonga advertising. They said: "We are football club supporters who object to the presence of banner advertisements for Wonga.com on the websites of the clubs we follow."

They took issue with the company itself, saying: "It has been argued that these companies are doing nothing illegal – but that is only because there are at present few, if any laws, restricting their activities in UK."

The supporters also drew attention to the fact the Office of Fair Trading is investigating the industry, and although it is yet to report its findings, the fans wanted their clubs to err on the side of caution.

Reform

By 25 July the industry has agreed to improve its codes of practice, and we will see at that point whether the worrying practices employed by some in the past will be outlawed. However, the Consumer Credit Counselling Service is warning that we cannot afford to miss this opportunity.

Its director of external affairs Delroy Corinaldi said: "What we will expect to see from these new codes is a detailed roadmap of how payday lenders are going to deal with the problems in their industry. In particular, we will be looking for improvements in key areas, including responsible lending and the treatment of people in financial difficulty. Anything less than this will represent a missed opportunity. We call on the Minister to keep the pressure on payday lenders and their trade associations to ensure that they produce improved codes that genuinely make a difference to business practices on the ground."

Profit

Meanwhile, Wonga continues its profitable business. It remains a prolific advertiser. In football it still sponsors the shirts of Blackpool football club, and Hearts in Scotland. It is also said to be considering floating on New York's Nasdaq exchange.

It could be argued that the ending of a small online advertising agreement is small potatoes for this booming company.

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