Citizens Advice urges FCA to place ‘health warning’ on payday loan adverts

Citizens Advice Bureau has urged the FCA to implement a “health warning” on payday loan adverts and to stop lenders targeting children through advertising.

CAB chief executive Gillian Guy called the practice of making payday loan adverts appealing to children “utterly unacceptable” and said lenders should be forced to display a warning about the consequences of taking out a loan.

She says: “It is utterly unacceptable for payday lenders to be running adverts that appeal to children. More and more adverts are appearing on music channels and TV stations popular with teenagers and young people as lenders try to entice the next generation of borrowers.

“We want TV viewers to take a stand against the payday loan industry by reporting irresponsible or misleading advertising. The FCA needs to introduce a clear and concise health warning on payday loan marketing which spells out the consequences of taking out a payday loan and to stop payday lenders targeting children.”

In July the Financial Ombudsman Service said the number of complaints about payday lenders more than doubled over the previous two years, but feared the increase was “only the tip of the iceberg”. A total of 794 payday lending complaints were made in the 2013/2014 financial year, compared with 296 in 2011/12.

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  • Joseph Egerton 16th September 2014 at 1:10 pm

    This is clearly necessary and it is scandal that nothing has been done so far. The FCA consulted on Payday Loan advertising and there is a rule requiring a warning on late repayment but I have not seen it appear prominently on TV advertisements

  • DH 16th September 2014 at 12:57 pm

    Well said Gillian !!! hope it doesn’t fall on deaf ears

    I can see Martin Wheatley scratching his head now ” didn’t we replace CAB with MAS ?”

  • Harrison 16th September 2014 at 10:50 am

    Just over a week a go on a Saturday morning I received a text message for the attention someone called Paul, offering a £500 short term loan. As you can probably tell my name is not Paul and I can only believe that Paul has put my phone number down in error when applying for a pay day loan.

    At the time I thought no more of it and didn’t respond. However over the last week and 3 days I’ve received over 150 text messages offering Paul ‘quick cash’, even on a Sunday morning.

    Most of the messages read ‘ unfortunately Paul we cannot off the £100 loan you applied for, but we can offer you £600.00. Call now for the money to be in your account this afternoon.

    Along with the 150 + text messages I have also received approximately 20 phone calls wanting to speak to Paul. They also personalise the messages by saying things like ‘Paul it’s Saturday, call now for £200 to party tonight’.

    Even though I believe people can make their own minds up on whether they use pay day loan companies or not. I also can see how people are almost bullied and tempted into replying and getting their hands on quick cash, especially if things are tough and life looks bleak.

    The industry is corrupt and resembles the wild west. It’s a bloody joke that mortgages are regulated with an iron bar when pay day loan companies are allowed to do whatever they want and can destroy lives.

    Signed….Not Paul