Adverts for payday loan companies should be banned from appearing during children’s TV programmes, the Labour leader Ed Miliband said.
Catchy jingles and playful cartoon characters result in “kids being used as a tool of the payday loan industry”, Mr Miliband wrote in the Sun on Sunday newspaper, accusing lenders of “targeting” children.
Comparing lenders’ adverts to those for gambling companies or junk food, he said that a Labour government would ask the Advertising Standards Authority (ASA) to prevent “irresponsible advertising” – and failing that, change the law in order to have them banned.
Mr Miliband has previously attacked Britain’s hidden “Wonga economy” as a symbol of the cost of living crisis faced by millions of families in the UK.
His call for action on the advertising behind it was echoed by Martin Lewis, the founder of MoneySavingExpert.com, who told a Commons select committee it amounted to “grooming”.
In a survey quoted today by Mr Miliband, the consumer advice website found that more than one in three parents with children under 10 had heard their kids repeating payday loan ad slogans.
And 14 per cent of those surveyed said that when they had refused to buy their child something, they had been “nagged” to get a payday loan to pay for it.
Mr Miliband said: “There is no justification for ever selling payday loans during children’s TV. We will stop it.”
Moving beyond a crackdown on advertising, the Labour leader said his party would cap the cost of credit imposed by the companies using powers in the Financial Services Act “which this Conservative-led Government has refused to implement”.
He said a Labour government would also impose heavier taxes on the profits made by payday lenders, and change planning regulations for local councils to allow them to “halt the growth of payday lending and betting shops along our high streets”.
Mr Lewis said he welcomed Mr Miliband’s call for action on the matter. He said: “Marketing is at the core of these loans, which cause many people pain and misery.
“They're slick, fast, efficient technological plays, the crack cocaine of lending that have created a market that didn't really exist five years ago - and sadly our lack of regulation means they thrive here while other countries have far more effective controls.
“To hear the Leader of the Opposition pick up the cudgel is a joy.”
A spokeswoman for the Department for Business, Innovation and Skills insisted the Government was already cracking down on irresponsible payday lenders, however.
She said: “Two misleading payday loan adverts have been banned over the past six months as part of our work with the ASA.
“New rules will also force payday loan adverts to include risk warnings and information about where the public can access free and confidential debt advice.
“New powers have been introduced to ban products, impose unlimited fines and order firms to refund consumers.
“These new restrictions build on the action taken by the Office of Fair Trading which has seen 25 payday lenders leave the market since March.”
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- Loans And Lending Market