Government rejects TV advert ban for payday loan companies
PAYDAY lenders will not be banned from daytime and childrens’ television adverts, the government said yesterday.
But they will have to include details of debt advice services, and warn customers of the consequences of failing to pay back loans, in the same way as alcohol adverts and tobacco packaging.
The Financial Conduct Authority (FCA) also responded to a report from MPs on the industry.
The Business Select Committee of MPs is concerned that borrowers do not fully understand that their credit ratings will be harmed if they do not pay back loans and that the high rates of interest on payday loans can mount up.
“The increase reported by Ofcom in the number of payday lending ads seen by children is concerning, but it is also important to note that they comprise a relatively small 0.6 per cent of TV ads seen by children,” said the government’s reply to the committee.
The Financial Conduct Authority is consulting on the type of information which will have to be included in adverts.
The government also backed a cap on interest rates and other fees on payday loans, after MPs campaigned for a limit on the cost of borrowing.