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Payday loan ads targeting children and unemployed ‘immoral’

20 Rhagfyr 2013

Citizens Advice has branded the marketing tactics of some payday lenders as ‘immoral’ and called for restrictions on advertising to people who clearly can’t afford to repay high interest loans.  The call comes as the Business, Innovation and Skills Committee releases its report into payday lending.

Citizens Advice Chief Executive Gillian Guy said:

“Targeting children and people out of work with payday loan adverts is immoral.  A ban on advertising during children’s TV programmes is a sensible step but further restrictions around ads aimed at people on very low incomes are also necessary.

“Citizens Advice Bureaux up and down the country are helping people get their finances back on track after they’ve been devastated by payday loans which have been bumped up by high interest rates and fees.  Limiting rollovers to one would go some way in avoiding debts getting out of hand but it’s also important that payday lenders behave responsibly.  Our evidence has found that 70 per cent of borrowers felt under pressure to extend their loan and 63 per cent were not told about the risks of extending.  

“Many people we help with payday loan problems should never have been given high-cost credit in the first place as it is quite clear they are unable to pay back the money.  In 3 in 5 cases people were not asked questions about their financial situation in order to establish if they can afford to repay.  A review of lenders’ affordability tests is a good idea as long as the regulator swiftly acts if it finds they’re not up to scratch.”

Notes to editors:

  1. The Citizens Advice service comprises a network of local bureaux, all of which are independent charities, the Citizens Advice consumer service and national charity Citizens Advice. Together we help people resolve their money, legal and other problems by providing information and advice and by influencing policymakers. For more see the Citizens Advice website.
  2. The advice provided by the Citizens Advice service is free, independent, confidential, and impartial, and available to everyone regardless of race, gender, disability, sexual orientation, religion, age or nationality.
  3. To find your local bureau in England and Wales, visit citizensadvice.org.uk. You can also get advice online at adviceguide.org.uk
  4. You can get consumer advice from the Citizens Advice consumer service on 03454 04 05 06 or 03454 04 05 05 for Welsh language speakers
  5. Citizens Advice Bureaux in England and Wales advised 2.3 million clients on 5.4 million problems from October 2013 to September 2014. For full 2013/2014  service statistics see our quarterly publication Advice trends
  6. Citizens Advice service staff are supported by more than 21,000 trained volunteers, working at over 3,000 service outlets across England and Wales.