Just days after an advert selling payday loans featuring reality television star Kerry Katona was branded “irresponsible” and banned, the former bankrupt is back on our screens in a new advert for the same company.
The Advertising Standards Authority (ASA) last week criticised the original advertisement for irresponsibly suggesting that people could borrow cash to help fund a celebrity-style lifestyle. It challenged whether the ad was misleading and irresponsible because the payday lender – Cash Lady – promoted itself as an alternative to banks while offering an APR higher than 2,000 per cent.
The ASA said references to Katona’s financial problems and bankruptcy within the ad “had the potential to encourage vulnerable viewers with financial problems and/or restricted credit from seeking to resolve them through the payday loan service” and concluded the ad was irresponsible.
But many people who cheered when the ad was banned were horrified to see a similar version appearing on television late last week. The ASA has said it is powerless to stop the Cash Lady from advertising again using Ms Katona as long as the new commercial has been cleared for broadcast.
The situation evokes memories of the long-running spat between Ryanair and the ASA where the low-cost carrier was hauled before the watchdog on numerous occasions in 2007 after falling foul of its standards. Soon after each ad was banned Ryanair released another, altered, advert.
By November, after Ryanair had found itself on the wrong side of ASA judgments for the third time in four months, the firm’s head of communications branded the watchdog the “awfully stupid authority”, adding it made “absurd decisions” based on complaints from competitors not customers.
Peter Sherrard, the communications chief, claimed he paid “no attention to anything the ASA says” and both Ryanair and the ASA referred the other to the Office of Fair Trading (OFT).
The latest case again draws attention to the ASA’s powers to stop companies slightly altering ads after rulings and putting them back on the air. While some firms spend millions on adverts – so any ban would hurt financially – Ryanair’s were low cost and made in house. The lack of spending meant it could quickly create another advert almost immediately after seeing their last ad banned by the ASA.
Commenting on the latest case, the ASA said: “It is not our role to ban entire sectors, including payday loans, from advertising or to outlaw the use of a celebrities in ads; but we are responsible for ensuring ads are prepared in a responsible way and do not contain anything harmful or likely to mislead.” Gillian Guy, chief executive of Citizens Advice, has campaigned against irresponsible advertising by payday lenders. She said: “Behind the glamorous marketing lie extortionate interest rates and charges and the misery of multiple rollover loans.”
The OFT has written to the largest payday lenders warning them to play fair with borrowers or be shut down.