Payday lenders warned over TV ads
Payday lenders should be careful about using catchy or upbeat jingles and animation in their TV ads, new guidance warns.
Promoting the use of a payday loan for the purposes of a holiday, a shopping trip, to fund someone's social life, a weekend away or a "slap-up meal" is also likely to be seen as condoning frivolous spending and therefore irresponsible, the advertising guidance for payday firms says.
The guidance has been published by the Broadcast Committee of Advertising Practice (Bcap) and it applies to television advertising.
It aims to bolster rules that prevent ads from trivialising the "serious nature" of taking out short-term high-cost loans.
The guidance comes after payday lender Wonga recently launched a new advertising campaign featuring ''hard-working dinner ladies and mums'' after ditching its controversial puppet ads.
Adverts could risk breaching rules that require them to be responsible to the audience and to society if they suggest loans are a suitable means of addressing ongoing financial concerns, condone non-essential or frivolous spending, or unacceptably distort the serious nature of payday loan products, Bcap said.
The guidance says that adverts will always be assessed according to their overall content and context.
But the use of animation, songs, a light-hearted and humorous tone, or jingles which are catchy or upbeat "have the potential to distract viewers from the seriousness of the decision to apply for a loan and should be handled with care".
The guidance says that for some consumers, home maintenance or other repairs would be considered essential, and potentially urgent in some circumstances, and depending on context it may not be irresponsible to market a loan for the purposes of fixing a broken boiler, car repairs or fixing a washing machine.
Using loans to pay for unexpected bills is likely to be acceptable, it says.
But if a payday lender puts a disproportionate emphasis on the speed of getting a loan, this is likely to be considered problematic.
The guidance says that phrases such as "Money within 24 hours of valuation" could help to give an impression that careful thought is not required before taking a loan.
But phrases which communicate the reasonable benefits of the product such as "It helped out as my boiler was broken and I was two weeks away from pay day" could be seen as acceptable.
The new guidance is intended to help firms when they prepare their advertising. It neither constitutes new rules nor binds the Advertising Standards Authority (ASA) Council in the event of a complaint about an ad that follows it.
Bcap said that during a review of the content of TV ads for payday loans, there was no substance found in some perceptions that some payday loan ads were aimed at encouraging children to ask their parents to take out a payday loan.
It said that for the avoidance of doubt, no ad may directly exhort children to purchase a product or to ask others to do so for them.
It will launch a public consultation by the end of July into the scheduling of TV ads for payday loans, to see if further restrictions are needed.
Broadcasters are currently required to exercise responsible judgments on the scheduling of ads and avoid unsuitable juxtapositions between advertising material and programmes, including those aimed at children.
A wider clampdown has been taking place on the payday lending industry in recent years after debt charities reported surging numbers of people struggling with payday loan debt.
The Financial Conduct Authority (FCA) has taken over the regulation of payday firms and imposed restrictions on them to prevent borrowers' debts spiralling out of control.
Russell Hamblin-Boone, chief executive of the Consumer Finance Association (CFA) which represents short-term lenders such as the Money Shop, Quick Quid, Payday UK and Peachy, welcomed the guidance.
He said: "CFA members have consistently shown a commitment to only reaching appropriate audiences so we look forward to providing a detailed response to the consultation on scheduling of TV ads for payday loans."
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