Tell MSE and CAB what you think about payday loan adverts

Tiddlywinks

bigadaj wrote: »

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

Actually, I disagree.

Pay day lenders do provide a service which does not need to be exploitative if both parties fully understand what they are agreeing to.

The problem lies with desperate people who borrow in panic with no idea (or rose tinted specs) how they will make the repayments.

Used correctly, for very short term borrowing, the service can be useful to some who do not have access to mainstream funding.

bigadaj

Tiddlywinks wrote: »

Actually, I disagree.

Pay day lenders do provide a service which does not need to be exploitative if both parties fully understand what they are agreeing to.

The problem lies with desperate people who borrow in panic with no idea (or rose tinted specs) how they will make the repayments.

Used correctly, for very short term borrowing, the service can be useful to some who do not have access to mainstream funding.

We may have different opinions but I stand by mine.

The first thing to do after getting out of debt, and arguably before in many cases, is to save cash as an emergency fund.

Use of payday loans automatically means that such funds are not in place.

I did say in most scenarios and you can of course construct scenarios where a short payday loan can be less expensive than an unauthorised overdraft, however this still means there is inadequate financial planning at that point.

JuicyJesus

redpete wrote: »

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

Two words: Joe Camel.

http://en.wikipedia.org/wiki/Joe_Camel

In any event, even if they aren't aimed at children, they still infantilise finance. We already have an epidemic of people not taking their finances seriously (often ending in the use of payday loans), so portraying a high interest loan with cuddly wuddly granny puppets is the wrong image.

I'll just copy and paste some regulations I posted on an old thread that I think would pretty much sort the whole thing out:

1. Advertisements for payday loans must not be broadcast in peak hours or during the broadcast of programming aimed chiefly or solely at those too young to take out a payday loan themselves.
2. Advertisements for payday loans must position themselves solely as a lender for emergency priority spending and must not encourage their use for any form of discretionary spending or for any form of non-specific spending (e.g. “a few extra pounds before payday”.)
3. Payday loans must be portrayed solely as a service of last resort. Comparisons between payday loan services and mainstream facilities offered by banks and building societies, such as but not restricted to overdrafts or credit cards, must not be offered.
4. In addition to the APR (annual percentage rate) required to be displayed by law, in equal sized and typefaced lettering to the APR the advert must also display the cost in interest of borrowing a nominal sum of £100 for 14 days.
5. The advertisement must bear the following risk warning in such a way that it is visible, legible and not obscured in any way:“Payday loans are a serious financial commitment and should not be taken out unless you will be fully able to repay the loan on the due date specified without causing yourself hardship. Failure to repay will lead to damage to your credit rating; use of payday loans may be viewed negatively by other lenders.”

I'm not against payday loans on principle. They are a product which has a place, as a strict last resort source of credit for dire emergencies. It is their marketing as a first line source of easy cash that is the main issue, and their irresponsible advertising and positioning.