As expected today, Bolton Wanderers announced a shirt sponsorship with QuickQuid, a provider of pay day loans. Well, that’s the polite description of what they do. Others refer to the company, and others like it as ‘legal loan sharks.’
QuickQuid provide finance marketed as short term at extremely high rates of interest. For example, borrowing £100 for a thirty day period would cost between £20 and and £29.50 in finance charges, according to illustrations on the company’s website.
Longer term arrangements are pricier. Borrowing the same £100 for ninety days results in a total repayment of £188.50 in the most expensive scenario. That’s just the thin end of the wedge. No pun intended.
What if you can’t pay the money back? There are a couple of options, which can be exercised with QuickQuid’s agreement. One is to extend the term of the loan, the other to re-finance. Both incur additional charges. It doesn’t take long for interest payments to dwarf the original amount borrowed.
Given the cost, only consumers on a low income with no access to other forms of credit would use these services. It’s easy to criticise someone doing so, and then finding themselves in difficulty. The terms are laid out beforehand, right?
Now imagine budgeting down to the last penny for food, heating and rent, only to be blown off course by an emergency. Try sending the kids to school looking half way decent when the washing machine packs in. Suddenly, those finance charges don’t matter. The money is needed, and there’s nowhere else to go. And so it begins…
If that sounds melodramatic, have a look in the local paper or the job centre and see the pitiful wages on offer. One government outsourcer in Bolton town centre pays the vast majority of its 1300 work force less than £15,000 a year.
Even before the credit crunch unemployment had risen by 15% in the town. Some might see the area as ripe for investment. To others, with ready capital, it’s a chance to make even more money. What an opportunity to advertise on the shirts of millionaire footballers.
The strain gets too much for some. Anthony Breeze, a 36-year-old father from Bolton, who owed payday loan companies £1,600, committed suicide by setting himself on fire. In April, Boltonian Kenny Davies, a 23-year-old rugby player, also killed himself after struggling with serious debts.
At least Bolton Wanderers are quids in. Still no pun intended. Actually they’re not. The deal will bring in around £500,000 over two seasons. In other words, £250,000 a year, or half Phil Gartside’s salary. To put the numbers further into context, the club has a debt of £136 million, £83 million of which has been run up in the last three years. One wonders who they’ve borrowed the money off.
At least the chairman is happy. “In our discussions it became obvious very quickly that both parties wanted to develop a partnership that engaged with all elements of the football club and community, and as much as anything else, to bring some real fun to match days,” he said.
Fun for who, Phil?
Sign the petition – Yes, the deal has been done, but you can still demonstrate opposition
Bolton Credit Union – A better way to borrow money and a chance to save too.
StepChange (formerly the Consumer Credit Counselling Service) – A free service for those with debt problems
The Government Threatens to Act Against Payday lenders – The heavy stuff
– Richard McCormick