Payday loans industry faces advertising crackdown in 2014

THE PAYDAY loans industry could face advertising restrictions when the Financial Conduct Authority (FCA) takes responsibility for the sector in April 2014.

Martin Wheatley, head of the regulator, yesterday said he had serious concerns over the marketing of short-term loans with high interests rate and will consider new rules on marketing campaigns.

“If payday loan companies are genuinely targeting a particular income bracket – people with jobs – why do they advertise on daytime television?” he asked.

Wheatley was speaking after a government summit on the industry, hosted by Lib Dem minister Jo Swinson.

But the Institute of Economic Affairs warned curbs on the sector could make it harder for the poor to avoid financial crises. “Evidence shows us that bans and restrictions can often make a difficult situation more difficult still,” said director general Mark Littlewood.