Prime Minister’s Adviser Leaves for Payday Loan Company

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One of the Prime Minister's advisers left his government post to become a lobbyist for a payday lender. Jonathan Luff, the Prime Minister’s advisor on digital strategy, will be starting immediately for Wonga, an often criticized payday loan dealer.

Luff will transition from a government aid to an influential lobbyist. Although the switch is receiving negative press, Luff is a civil servant and not a politically appointed special adviser, so his transition to Wonga is legal. The switch has been met with stiff critique of the ease of access between ministerial aides and lobbying.

Stella Creasy, a Labour and Co-operative Member of Parliament for Walthamstow, warned that payday lenders are now influencing government parties as quoted in a released statement.

Wonga was launched in 2007 as an online provider of short-term payday loans. They loan up to £1,000 (about $1,606) for a maximum 30-day period. Although the company markets itself as a transparent lending company, it does not uphold all of its claims, as reported by UK-based users. Even though the main webpage states the payday loans last less than 30 days, it is possible to rollover the loans. This is one predominant criticism of all payday loans. If the loans are paid off in a month’s time, then the borrower can proceed with their normal life. But for many borrowers, they simply do not have sufficient funds to pay off an interest-heavy payday loan.

But payday loan accounts are not the only issues for Wonga opponents.

Wonga has come under more fire in the past month for signing a new deal with soccer team Newcastle United. The £24 million (about $38,548,704) deal, which spans four years, includes stadium and club t-shirt sponsorship. In the past, Wonga has sponsored other sports team, including soccer teams Hearts and Blackpool.

Although fans of the Newcastle United team are disgruntled about the new deal, other political parties are more worried about Luff’s recent move and its implications for government policy. Wonga is currently fighting new regulation that would limit its business activities. Luff’s career move is being viewed as a necessary addition for Wonga to change this regulation. A Wonga spokesman confirmed that Mr. Luff will join the company and lead its government affairs staff.

Creasy offered up a warning for Wonga’s recent employee additions and their sports affiliations. “Like many other legal loan sharks, Wonga is making massive profits from preying on consumers in Britain’s poorly regulated consumer credit market. They have used these profits to target our football clubs and Saturday night TV, and now they are targeting the highest echelons of government,” she said in a statement.

“This appointment only further raises concerns about how seriously this government takes personal debt. When most other countries have capped the costs of credit to protect their citizens from the debts this type of lending can cause, British consumers urgently need to know whose side their prime minister is on.”