Ban payday loans adverts on children's TV, MPs urge

Business, Innovation and Skills Committee told youngsters are at risk of being 'groomed' by short term lenders

A committee of MPs has called for a ban on payday lenders advertising on children's television, who are being bombarded by messages suggesting that asking for money is "fun", "easy" and "appropriate" from a young age.

The Business, Innovation and Skills (BIS) Committee heard evidence from consumer campaigners, who fear that the "cartoon puppets" used on adverts could give young children the impression that taking out a loan is fun and easy, warning that the next generation is being “groomed” towards such borrowing.

Figures from industry regulator Ofcom revealed that children aged four to 15 were exposed to 596 million payday loans adverts in 2012,  up from three million in 2008.

Overall, the average child aged 4 to 15 saw 70 payday loans adverts last year, although only 3 per cent of them were broadcast on children's television.

Committee chairman Adrian Bailey said: "It is worrying that our children are being exposed to such an extent to adverts that can present payday loans as a fun, easy and appropriate way to access finance.

"Children's programmes are simply not an acceptable place for payday loan adverts," he added.

Recommendations put forward by MPs include tackling emails and texts encouraging people to borrow, forcing lenders to contribute cash towards debt advice and improving the way they share information.

Wonga, one of Britain's most high-profile payday lenders, known for its TV ads featuring a trio of elderly puppet characters named Betty, Joyce and Earl who explain the process of taking out a short-term cash loan to viewers, dismissed the criticism as a "myth".

A spokesperson said: “The idea that Wonga advertises on children's TV channels or programmes is a myth. We have a strict, long-standing policy not to advertise in this way.”

Similarly, the Consumer Finance Association, whose members include The Money Shop, Quick Quid and Cash Converters, said its members do not advertise on children's TV channels.

The estimated size of the payday loan industry has doubled since the start of the financial crisis with payday lenders coming under intense scrutiny over their lending practices.

The Office of Fair Trading warned that some firms appearing to base their business around customers with poor credit history and a pressing need to borrow.

The OFT added that it is difficult for consumers to identify or compare the full cost of payday loans, undermining competition over price for loans. The OFT has referred the industry to the Competition Commission, which will report next year.

Next year will also see oversight of payday firms pass from the OFT to new regulator the Financial Conduct Authority (FCA) which has already set out plans to crack down on the sector.

The FCA's plans include limiting the number of times payday lenders are allowed to roll over loans twice, forcing them to put “risk warnings” on their advertising and limiting the number of attempts lenders can make to claw back money if there is insufficient cash in a borrower's bank account to two.

Last month, the Government announced plans to put a cap on the total cost of a payday loan. The level of the cap is yet to be decided but will be included in the Banking Reform Bill, which is currently going through Parliament.

Additional reporting agencies

PROMOTED VIDEO
News
people
News
Justin Bieber performing in Paris earlier this year
people
Arts and Entertainment
Martin Freeman and Lauren O'Neil in Jamie Lloyd's Richard III
theatreReview: The monarch's malign magnetism and diabolic effrontery aren’t felt
Arts and Entertainment
'Molecular Man +1+1+1' by Jonathan Borofsky at Yorkshire Sculpture park
tv
News
Glamour magazine hosts a yoga class with Yogalosophy author Mandy Ingber on June 10, 2013 in New York City.
newsFather Padraig O'Baoill said the exercise was 'unsavoury' in a weekly parish newsletter
Extras
indybest
News
people'She is unstoppable', says Jean Paul Gaultier at Paris show
News
ebookA unique anthology of reporting and analysis of a crucial period of history
Sport
Alexis Sanchez and apparently his barber Carlos Moles in Barcelona today
football
Arts and Entertainment
Miley Cyrus has her magic LSD brain stolen in this crazy video produced with The Flaming Lips
video
Arts and Entertainment
In his own words: Oscar Wilde in 1882
theatreNew play by the Oscar Wilde's grandson reveals what the Irish wit said at his trials - and what they reveal about the man
News
people
Arts and Entertainment
Unless films such as Guardians of the Galaxy, pictured, can buck the trend, this summer could be the first in 13 years that not a single Hollywood blockbuster takes $300m
filmWith US films earning record-breaking amounts at the Chinese box office, Hollywood is more than happy to take its lead from its new-found Asian audience
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

HR Advisor - 6 months FTC Wimbledon, SW London

£35000 - £40000 per annum + Benefits: Ashdown Group: HR Advisor - 6 Months Fix...

IT Manager - Tolworth, Surrey - £40,000

£37000 - £40000 per annum: Ashdown Group: IT Manager - Tolworth, Surrey - £40,...

Compliance Officer - Trading Firm - London

£55000 - £65000 per annum + excellent package & bonus expectations: Real Staff...

Senior Compliance Executive - Top Bank - London

£80000 - £90000 per annum + competitive: Real Staffing: A highly successful Co...

Day In a Page

The true Gaza back-story that the Israelis aren’t telling this week

The true Gaza back-story that the Israelis aren’t telling this week

A future Palestine state will have no borders and be an enclave within Israel, surrounded on all sides by Israeli-held territory, says Robert Fisk
A History of the First World War in 100 Moments: The German people demand an end to the fighting

A History of the First World War in 100 Moments

The German people demand an end to the fighting
New play by Oscar Wilde's grandson reveals what the Irish wit said at his trials

New play reveals what Oscar Wilde said at trials

For a century, what Wilde actually said at his trials was a mystery. But the recent discovery of shorthand notes changed that. Now his grandson Merlin Holland has turned them into a play
Can scientists save the world's sea life from

Can scientists save our sea life?

By the end of the century, the only living things left in our oceans could be plankton and jellyfish. Alex Renton meets the scientists who are trying to turn the tide
Richard III, Trafalgar Studios, review: Martin Freeman gives highly intelligent performance

Richard III review

Martin Freeman’s psychotic monarch is big on mockery but wanting in malice
Hollywood targets Asian audiences as US films enjoy record-breaking run at Chinese box office

Hollywood targets Asian audiences

The world's second biggest movie market is fast becoming the Hollywood studios' most crucial
Grindr founder Joel Simkhai: 'I've found love on my dating app - and my mum keeps trying to hook me up!'

Grindr founder Joel Simkhai: 'I've found love on my dating app'

Five years on from its launch and Grindr is the world's most popular dating app for gay men. Its founder Joel Simkhai answers his critics, describes his isolation as a child
Autocorrect has its uses but it can go rogue with embarrassing results - so is it time to ditch it?

Is it time to ditch autocorrect?

Matthew J X Malady persuaded friends to message manually instead, but failed to factor in fat fingers and drunk texting
10 best girls' summer dresses

Frock chick: 10 best girls' summer dresses

Get them ready for the holidays with these cool and pretty options 
Westminster’s dark secret: Adultery, homosexuality, sadomasochism and abuse of children were all seemingly lumped together

Westminster’s dark secret

Adultery, homosexuality, sadomasochism and abuse of children were all seemingly lumped together
A History of the First World War in 100 Moments: Dulce et decorum est - a life cut short for a poet whose work achieved immortality

A History of the First World War in 100 Moments

Dulce et decorum est: a life cut short for a poet whose work achieved immortality
Google tells popular music website to censor album cover art in 'sexually explicit content' ban

Naked censorship?

The strange case of Google, the music website and the nudity take-down requests
Howzat! 8 best cricket bats

Howzat! 8 best cricket bats

As England take on India at Trent Bridge, here is our pick of the high-performing bats to help you up your run-count this summer 
Brazil vs Germany World Cup 2014 comment: David Luiz falls from leader figure to symbol of national humiliation

David Luiz falls from leader figure to symbol of national humiliation

Captain appears to give up as shocking 7-1 World Cup semi-final defeat threatens ramifications in Brazil