MPs demand ban on payday loan ads during children's programmes
A committee of MPs has called for a ban on payday loan adverts during children's TV after a review into the activities of companies such as Wonga.
Loans: MP calls for curb on ads
Adrian Bailey MP, the chair of the Business, Innovation and Skills committee, said children’s programmes are an unacceptable place for payday loan adverts and it is "worrying" that children are being exposed to ads that present loans as a fun, easy and appropriate way to access finance".
Bailey drew attention to recent research by Ofcom that claimed children aged from four to 15 years old viewed a total of 596 million payday loan ads last year, meaning the average child saw 70 payday loan ads in 2012.
The report from the committee believes further action is needed to protect consumers including "health warnings" on advertising, which have previously been proposed by the Financial Conduct Authority (FCA).
The committee has recommended the warnings are subject to the same requirements for prominence as Annual Percentage Rates (APRs) and the "health warning" is repeated at every stage of the application process.
Gillian Guy, chief executive of Citizens Advice, lobbied for health warnings when she was called in front of the committee.
She said: "There are no health warnings on these adverts. There is nothing about the dangers that they could present, or, indeed, that they are not the solution to all things and there might be some other way out of a debt situation, rather than more debt."
The committee has also called for the FCA and Information Commissioners Office to work together to identify the extent of mobile marketing "bad practice" within the payday loan sector.
Bailey said: "Vulnerable people at their lowest ebb should not be bombarded by texts and telephone calls offering high cost loans. But this is what anecdotal evidence suggests is happening.
"The FCA must work to build an evidence base of who is driving the market and who is being targeted. If inappropriate targeting is happening, all brokering of payday loans through email and text should be banned."
Andy Lapointe, UK public affairs manager at QuickQuid, told the committee individuals had to "opt in to receive texts from us" while Wonga asserted that it does not text people "as a way of getting business".
There should also be real-time data sharing between the payday loan firms established by July 2014 to ensure consumers can afford the payday loans and do not have multiple payday loans with different companies at one time, according to the MPs.
This article was first published on marketingmagazine.co.uk
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