The money-lending firm Wonga, the current shirt sponsors of Newcastle FC, has agreed to write off the debts of more than three hundred thousand customers. It follows a review from the financial watchdog which requires the firm to make significant and immediate changes to its business. The decision means that 330, 000 people who are currently in 30 days of arrears with Wonga which have the balance of their loan written off and will owe the company nothing.
Meanwhile, around 45,000 customers who are up to 29 days in arrears will be asked to repay their debt without interest and charges and will be given an option of paying off their debt over an extended period of four months.
Wonga's new chairman has spoken about the move, confirming that it comes following concerns from the Financial Conduct Authority.
Newcastle City Council says that its pension fund does invest in the payday loan company Wonga, but it has no control over it.
It added that the council has voiced its dislike that the pension fund invests in companies which it believes 'harms the city'.
Citizens Advice's chief executive Gillian Guy said payday lenders must focus on customer welfare, not profits, after Wonga released strong figures today.
The Church of England said it was "committed to exploring" a credit union scheme but warned it would not be in place until 2014 at the earliest.
The Archbishop of Canterbury said he wanted to compete Wonga out of business by developing the Church's own credit business.
Payday lender Wonga has reported surging profits as its number of customers swelled to more than one million.
- Profits after tax rose 36% to £62.5 million during 2012 - the equivalent of more than £1 million a week.
- Revenues surged 67% to £309.3 million.
- The controversial online lender lent £1.2 billion in the year, a rise of 68%.
Ahead of Newcastle United's first game of the season, Wonga representatives will meet fans to discuss their sponsorship deal and any concerns relating to it. The payday lender has also invited local MPs to a public forum this afternoon.
Newcastle United striker Papiss Cisse has reportedly agreed to wear a shirt which bears the club's primary sponsor Wonga.
The Senegal international had refused to wear the jersey displaying the pay-day lender's logo on religious grounds, as earning interest is forbidden by Islamic Law. The 28-year-old even pulled out of the club's pre-season tour of Portugal over the issue.
However, it's understood that after weeks of negotiations the club and Cisse have reached a resolution, with the player finally agreeing to wear the shirt.
Work has begun on removing the Sports Direct signs at Newcastle stadium.
The stadium will return to its original name, St James' Park, following Wonga.com's sponsorship of the club next season.
As part of the sponsorship deal, the name of the stadium will return to St James' Park.