Wonga to pay £2.6 million to customers in compensation
An investigation concluded by the Financial Conduct Authority (FCA) into the practices of Wonga, Britain’s leading pay-day loans company, has revealed “unfair and misleading debt collection practices”. It has emerged that between October 2008 and November 2010 the firm sent letters to customers in arrears from fake law firms, giving customers the impression that their outstanding debt issues had been passed to a law firm to investigate. The letters, often beginning “We have been instructed by Wonga to recover from you a debt of £X …” have been criticised by the FCA as a backhand tactic to unfairly increase the pressure on customers. There will be a flat rate of £50 compensation for the 44,556 customers affected, as well as some receiving a refund of the charges incurred to the fake law firms, estimated at around £400,000. Which?, the consumer group, welcomed the decision, with its executive director stating, “It is a shocking new low for the payday industry that is already dogged by bad practice and Wonga deserves to have the book thrown at it.” (Guardian, BBC)
Business leaders should take responsibility for losing popularity
The outgoing Chief Executive of J Sainsbury Plc, the UK supermarket chain, has called on business leaders to take responsibility for companies losing their public reputations and standing in society. Speaking at the MT live conference in London, King called on businesses to look beyond legal compliance, saying this is not good enough to be considered a good corporate citizen. King cited growing consumer awareness as an increasingly powerful tool for changing company behaviours, as seen for example in Starbucks’s relocating its European HQ to London, after consumer protests against its tax practices. Another issue rising up the consumer agenda is the working conditions that a company is responsible for, whether it be zero-hour contracts in the UK, or factory conditions in the developing world. In King’s view, “the power of the consumer wallet is more powerful than the vote”, and it is time for more businesses to wise up to this fact. (Guardian)
Human Rights
Ikea and Save the Children expand plans to prevent child labour
The Ikea Foundation has announced an expansion in funding of $9.4 million to its programme to protect children in cotton growing communities in India, and prevent them from entering child labour. To date the existing initiative is said to have reached 600,000 children and the extra investment will extend the programme’s reach to an additional 790,000. The additional extra funding will see Save the Children, working with domestic NGOs and state governments in Punjab, Haryana and Rajasthan to provide access to quality education for children, including teacher training, and the development of local committees to protect children, better manage schools, and tackle gender discrimination. The initial phase of the programme was focussed on the states of Maharashtra and Gujarat, and moved 150,000 children out of the fields and into classrooms. (Sustainable Brands)
Technology
Japan seeks to fast-track hydrogen powered cars
Japanese Prime Minister Shinzo Abe’s strategy for growth, announced this week, outlines several measures to promote the development and use of hydrogen fuel cells in cars. Hydrogen fuel cells are currently both costly and complex but could have tremendous impact in reducing automotive pollution. The growth strategy called for subsidies and tax breaks for those purchasing fuel-cell vehicles and a relaxation of regulation on hydrogen fuel stations. It is expected that by 2015 the carmakers involved, including Toyota and Honda will start selling fuel cell vehicles. Toyota’s new car will cost $68,700 and is planned to go to market in the USA, Europe as well as Japan. It is hoped the tax breaks and subsidies could bring the cost of the car down to $20,000. Hydrogen powered vehicles only emit water vapour and heat (though the production of Hydrogen fuel does emit some CO2), as well as running five times longer than an electric car without a lengthy recharge period. Speaking about the development of these vehicles a Toyota spokesperson said “Unless you are willing to accept losses initially, it’s not possible to increase sales.” (New York Times)
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