Short-term lending isn’t black and white: make sure you read the small-print

As a Newcastle United fan, it was a bleak day when the Magpies announced a sponsorship deal with payday lender, Wonga. A company that charges extortionate levels of interest emblazoned across the chests of the players? Really?

Thankfully, the NUFC/Wonga partnership is drawing to a close, much to the relief of legions of black and white fans, and presumably to Wonga too given last year’s slide in profits not to mention the millions paid out in compensation to customers, including to those in arrears who received letters from fake law firms.

But, initially at least, it was no wonder that Wonga could afford a £24 million four-year shirt sponsorship deal. The payday loan provider typically charges a representative APR in excess of of 1,500 per cent. That’s not a typo.

As if that wasn’t enough, last autumn Wonga admitted that it had double-charged thousands of customers for their loans, leaving some unable to pay their bills on the final day of the month.