Simon Read: Yet again payday lenders prove their irresponsibility
Will payday lenders ever stop their irresponsible advertising? Another one was slammed this week for encouraging consumers to take out a short-term loan for frivolous spending.
The Advertising Standards Authority said the ad for Pounds to Pocket – owned by CashEuroNet – "promoted the process of borrowing as trivial and without responsibility".
The charity Citizens Advice had complained about the Happy Birthday email from the lender which said "enjoy your birthday worry-free" and offered a 20 per cent discount.
The ASA said taking a loan was a serious decision, which required deliberation. "Encouraging recipients to take advantage of the service through a discount for immediate application, Pounds to Pocket had urged a decision, thereby limiting the amount of time those interested in a loan were able to give to proper consideration," it said.
In short, the lender's email "was irresponsible".
Citizens Advice reported seven payday loan adverts to the ASA in March, including two from Wonga. The charity's chief executive Gillian Guy said: "Payday loans can add to financial worries, not take them away. It is irresponsible for any lender to promote a casual attitude to borrowing by suggesting using loans are worry-free and can be used to fund celebrations."
The ban comes after an inquest revealed that grandfather Ian Jordan took his own life after racking up debts of £20,000 with more than a dozen payday lenders, one of which charged him more than 5,000 per cent interest.
Payday lenders remain in the dock as more of these shocking stories appear. They have already been forced to clean up their act by the City watchdog and face a cap being introduced on the cost of credit from next January.
I've been writing about the excesses of rogue lenders for some years now and it's been a long, hard slog trying to get them to start being reasonable with borrowers. Sadly, I reckon it will still be some while before I'll be able to report on a responsible short-term credit industry.
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