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Clamp down on payday loan adverts essential to protect consumers

2 Ionawr 2014

Citizens Advice has said a clamp down on payday loan advertising is essential to ensure lenders aren’t preying on youngsters and people who can’t afford loans.  

New figures from Channel 5 News and YouGov show 70% of people would support a ban on all advertising by payday loan companies, including on television, radio, online, in newspapers and on posters.

Citizens Advice Chief Executive Gillian Guy said:

“It is utterly irresponsible for payday lenders to target children and people out of work with adverts that mask the difficulties payday loans can cause. The industry claims it only lends to people who can afford to repay loans, but Citizens Advice figures highlight that 61 per cent of loans come without proper checks and 3 in 4 people struggle to pay back loans.

“In order to protect consumers, the payday loan industry needs to behave fairly and responsibly, and compete on price instead of speed of loans.  A ban on advertising to children and people without a job would stop payday loans appearing as the norm and could stem the tide of people on limited incomes struggling with mountainous debt caused by payday loans.

“At this time of year, many people will be feeling the pinch and looking at ways to sort out their finances.  It’s important that those who need a short-term loan to tide them over have a range of options to choose from.  Banks could open up the market and offer more choice by introducing a short-term micro-loan.”

Citizens Advice is urging people to report an advert for a payday loan that they think is irresponsible or misleading.

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.