Wonga.com and co to face advertising restrictions
Wonga.com and other short-term loan companies are to face restrictions in how they can advertise, under plans announced by the Government today.
Wonga.com: market-leading payday loan lender
The Government is going to work with the Office of Fair Trading, the Advertising Standards Authority and the industry to bring in new restrictions on advertising and tougher codes of practice, "as soon as possible".
After finding "widespread irresponsible lending", the OFT has given the leading 50 payday lenders, understood to include the marketing-leading Wonga.com, 12 weeks to change their business practices or risk losing their licences.
In April 2014, the Government will give responsibility to regulate the payday lending industry to the new regulatory body, the Financial Conduct Authority, who will have more rigorous powers to weed out rogue lenders.
Jo Swinson, consumer minister and Liberal Democrat MP for East Dunbartonshire, said: "The evidence of the scale of unscrupulous behaviour by payday lenders and the impact on consumers is deeply concerning.
"The Government wants to see tough action to clampdown on the advertising of payday lending, and will start immediate work on this. The Government will work closely with the Office of Fair Trading, Advertising Standards Agency, Committees of Advertising Practice, and industry, to make sure advertising does not lure consumers into taking out payday loans that are not right for them."
In a statement, the ASA said it had already taken action against advertisers who have promoted payday loans in an irresponsible manner, but that if there was a case for change, the ASA would "play our part".
There has been much debate about whether further restrictions are needed on some types of brands in recent weeks and last Friday, an alliance of health bodies launched a campaign to ban all alcohol ads, as revealed in Campaign.
This article was first published on campaignlive.co.uk
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