Tell MSE and CAB what you think about payday loan adverts

Former_MSE_Wendy

Both MoneySavingExpert and Citizens Advice aren't fans of payday loan ads.

As Martin said recently "Payday lenders are now so profitable, they have huge advertising and film budgets which bring in more customers, making even more profit. This vicious circle means we now see these loans normalised. That's why we need legislation or regulation to disrupt this market."

And Citizen Advice chief executive Gillian Guy said: "I think we need to look at a whole raft of things on advertising, to analyse what market segment the companies are targeting. We hear that they're not targeting the people we're talking about, and yet the ads are on daytime television, they use cartoons, at times when people we see with multiple debts might be at home because they're unemployed."

We want to know what you think and so does the regulator.

There are a few ways you can help.

1) Tell us if you've seen an irresponsible ad
Where did you see it and how do you think it was misleading?

A payday loan could be irresponsible if:
• It's clearly aimed at children.
• It's targeted at vulnerable people.
• It shows payday loans being used for shopping or social activities.
• It suggests that a payday loan is a better idea than another type of loan.

You can also report the ad to the Advertising Standards Authority who have the power to ban bad ads.

2) Comment on the regulator's proposed 'wealth warning'
Is it a good idea and is the warning strong enough?

As part of it's overall plan to improve the market the FCA has said the following warning will need to appear on all payday loan ads:

Think! Is this loan right for you?
Over 2 million short-term loans were not paid off on time in 2011/12. This can lead to serious money problems.
If you’re struggling, go to www.moneyadviceservice.org.uk for free and impartial help.

3) Let us know if you've seen the Wonga film in a cinema
Where were you and what did you think?

A few weeks ago payday lender Wonga released a 30 minute film made by a Bafta-nominated director. The film is made up of 12 short stories from Wonga users and we've heard some of these stories (not the full 30 mins) have been playing in cinemas.

4) All other thoughts welcome, just reply below to tell us what you think

Thanks

MSE Wendy

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cepheus

There should be a warning that simply taking out a payday loan could reduce your chance of a successful mortgage application

Taking out a payday loan could endanger people's chances of getting a mortgage whether or not they had difficulties repaying the cash, the BBC has learned.

Nearly two-thirds of brokers contacted by trade publication Mortgage Strategy for Newsnight had a client turned down for a mortgage after a payday loan.

A record of a loan will remain on a credit record for nearly six years.

All the same it doesn't specify if this was a causation or association (we might expect the sort of people who apply for payday loan wouldn't be suitable for a mortgage anyway) so we have to be careful in interpreting this.

GazHatesBanks

Can't really comment on the adverts as I never see them (at least not on TV), but as far as the 'wealth warning' goes I don't think it will have any affect (just look at the warnings around smoking, drinking and gambling - net effect virtually nil).

Generally, people who take out PDLs are so desparate for cash that they're unable to see past a week anyway or are so irresponsible that they simply don't consider the cost of these loans or how they will ever pay them back.

It's time to put the onus on these businesses making the right decisions by banning them from using continual payment authorities to collect payments from debit cards (where they can keep trying to take the money at random intervals and for random amounts until they get something). They are in effect treating themselves as preferred creditors as it potentially means that they are being paid before mortgage/rent, food, council tax, etc.

Why should they get preferential treatment that the high street banks/lenders are not able to get AND get away with charging many times more in interest that the traditional lenders would charge?

chanz4

Those that lend are adults

[Deleted User]

i never see them,if i`m watching any commercial station and ads for anything come one i switch over to news 24 for 3 minutes

kiss_me_now9

I'd support a total ban on them. There is no need for them in our society. They're irresponsible and the interest rates are ridiculous.

As a 23 year old, who's just finished uni, it is crazy how many people my age and younger who I have spoken to who think they're a reasonable idea and/or have taken them out for stupid reasons (most stupid reason: to pay for a Nandos, a week before payday). There's no warning of the crazy high interest rates in the adverts.

From a marketing point of view, Wonga is the worst I think, and Amigo loans - both advertise as if there's no consequences and it's incredibly easy to get hold of some money. The sliders worry me as it's so easy to see how much you can get with no real indication of the interest rate that goes along with that.

ch3101

I'd like a ban on them.

It is far too easy to get them and people aren't aware of the consequences of payday loans. In fact I don't think people these days know anything about money management at all.

I for one have a few friends who have taken payday loans just to go on a night out. One I said to, "you realise you'll struggle for credit/a mortgage now" but the response was "I'm only 20, don't need to worry about that".

Payday loans don't have a place in society. They encourage people to take them when they are struggling and should just seek advice and they allow people to just bottle everything up, getting further into debt then the situation is much worse.

Having said that, the main reason they seem bad is that they know what kind of idiots are going to take them out and try not to pay them back so I think they should charge exorbitant interest rates and add charges and fees for everything they can.

If the adverts do stay on tv though, they must come with warnings and more information about the effect of them. We've all seen stories on here of people being told to take them and pay them back to boost their credit rating etc, and that all comes from the lack of financial education that I mentioned earlier. So if, when you took a payday loan, it said about how other lenders for "real" credit may see it as a terribly bad thing, then people would hopefully think twice. I for one have declined many people because they have had a payment to wonga or quick quid etc on bank statement when applying for a loan, and they always ask "how does that affect it". The reason?

Payday loans indicate that you have completely run out of money, decent credit any have no way of getting any funds until you're paid. So if you apply for, say a loan, who's to know that you won't run out of money when trying to pay that back? It makes you appear as a huge risk to any financial organisation, and people need to realise that.

redpete

MSE_Wendy wrote: »

1) Tell us if you've seen an irresponsible ad
Where did you see it and how do you think it was misleading?

A payday loan could be irresponsible if:
• It's clearly aimed at children.

It is frankly ridiculous to suggest that an advert is aimed at children' because it uses puppet characters.

bigadaj

redpete wrote: »

It is frankly ridiculous to suggest that an advert is aimed at children' because it uses puppet characters.

Doesn't this mean it's aimed at people that are mentally children rather than physically so.

If you are an intelligent and responsible adult then there are frankly very few scenarios under which you would consider a payday loan.

Nikkisun

I took my son to see Gravity at the cinema last week and we saw one of the short Wonga films during the adverts. Even my 13 year old son said the film made no sense from people who lend money.

Tiddlywinks

chanz4 wrote: »

Those that lend are adults

I certainly hope so... otherwise it'd be child labour!