It seems television advertisements for payday loans can be found anywhere and everywhere in Great Britain. If you think you and your family are being bombarded with payday loan advertising then you’re correct, at least according to a new study published late last month.
Telecommunications regulator Ofcom found that the number of television ads for payday loans online has astronomically increased by 3,500 percent. The study discovered that firms, such as Wonga, the largest payday loan lender in the country, are targeting their advertisements to impoverished households with children and families that have been significantly hurt during the global economic downturn.
In 2009, there were only 11,000 payday loan ads broadcasted on television. Two years later, that number skyrocketed to 243,000 and then a year later it went up again to 397,000. This led to a jump in viewership: 12 million views in 2008 to 7.5 billion views in 2012. This accounts to roughly 152 views per person – the average low-income individual saw it about 203 times.
Furthermore, according to the organization’s report, youth were also targeted. The average four- to 15-year-old viewed these payday loan advertisements 70 times in 2012 alone and roughly three percent of the ads were displayed during children’s programming. This doesn’t sit well with Gillian Guy, CEO of Citizens Advice, a consumer watchdog and community organization.
“Payday lenders are unashamedly and irresponsibly using adverts to prey on poorer households in a bid to capitalise on the cost of living crisis,” Guy said in an interview with the Daily Mirror. “They should not be targeting children and teenagers with adverts. It is deeply concerning that children and teenagers were exposed to three times as many payday loan ads in 2012 compared to in 2010. More and more adverts are appearing on music channels and TV stations popular with teenagers and young people as lenders try to entice the next generation of borrowers.”
Assistant general secretary Steve Turner, meanwhile, warned that this will cause children and young people to embrace the “culture of debt” in the future.
“It is not just children being infected by a payday loan culture – research shows people are borrowing £660 a month just to pay for food, housing and heating,” Turned added in his remarks.
The issue has become quite ubiquitous and now the Business, Innovation and Skills Committee (BIS) are urging Members of Parliament to ban payday loan advertisements during children’s programming after listening to testimony from consumer advocates.
Wonga disagrees with the research and says that its advertisements toward children are nothing but a “myth,” reports the London Telegraph.
“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,” a Wonga spokesperson told the British news outlet.
Members of the Consumer Finance Association (CFA), such as Cash Converters, The Money Shop and Quick Quid, say they do not advertise to children.
In 2012, the payday loan industry was valued at £2 billion, up from $900 million four years ago.