Payday Loan Advertisements
Debate between Lord Bishop of St Albans and Baroness Shields
Baroness Shields
The Government are concerned about consumer detriment from the payday loan market. The introduction of mandatory risk warnings and signposting to debt advice is part of this new regulation. Since April 2014, when the FCA took over responsibility for regulating consumer finance from the Office of Fair Trading, there has been a 35% drop in the number of payday loans, and Citizens Advice has today announced a 53% drop in reported problems with payday loan companies.
The Lord Bishop of St Albans
My Lords, research by MoneySavingExpert found that one-third of parents with children under the age of 10 have heard their children repeating slogans from payday loan adverts. We have already heard from the noble Baroness about research from the Children’s Society entitled Playday not Payday. It also found that 34% of adults believe that these adverts are specifically focused at children, and 27% said that they believed that they were pressurising children to ask their parents to take out loans, so the evidence from parents is fairly clear. In the light of the Government’s welcome emphasis on personal responsibility and financial prudence, does the Minister think that it is more important that we listen to people who are associated with the advertising industry or to the voices of the parents, who are pretty clear what these adverts are actually doing?
Baroness Shields
The ASA has taken action in the past two years on 25 advertising campaigns created by the payday loans industry and banned them from broadcast. We as a Government take this very seriously; hence we support the recommendations in the BCAP review which take note of it. We believe that the advertisements that the Children’s Society flagged in the study that it released would be banned under the new rules.