Learn more about The Debt Trap, our campaign to end debt's damaging effects on children.
We're calling on government to back ban on payday loan adverts
The Children’s Society has called on the government to back a ban on payday loan adverts during children’s television, ahead of a debate in Parliament.
The Children’s Society – whose call is backed by a petition signed by nearly 10,000 members of the public – says that there is strong evidence that children are being regularly exposed to payday loan adverts.
The charity’s recent Debt Trap report found that more than half of children (56%) said they were exposed to advertising for loans ‘often’ or ‘all the time’. And Ofcom research shows the number of payday loan television adverts increased 23-fold to 397,000 a year in just four years to 2012.
A cross party committee of MPs recommended the government impose such a ban in 2013, but the government has not taken up the recommendation. The government have said that regulators already have the power to ban irresponsible adverts, but The Children’s Society argue that this does not go far enough.
Stricter rules on loan ads
Tomorrow, MPs will debate the Consumer Rights Bill, which is an opportunity to consider stricter rules on advertising by payday lenders.
Matthew Reed, Chief Executive of The Children’s Society, said:
'Any advert that promotes high-risk, high-cost loans during programmes aimed at children is irresponsible. There is a growing body of evidence that children are being regularly exposed to loan advertising.
'We see every day from our work that debt traps families in poverty and has a devastating impact on children. But this kind of advertising on children’s television will make payday lending seem normal.
'While parents are struggling to cope with the rising cost of living, the adverts tell children that it is easy to get quick cash.
'While regulators and the government wash their hands of the issue, we now have more than a thousand payday loan ads on television every day and the majority of children we surveyed telling us they are exposed to loan ads often or all the time.
'The government can’t waste another opportunity to take a lead and signal its support for a ban.'
The Children’s Society’s Debt Trap report also found that:
- 42% of parents struggling with payments on payday loans said they were treated ‘badly’ or ‘very badly’ by their lender
- 56% of children aged 10-17 said that they saw advertising for loans ‘often’ or ‘all the time’
- Only 21% of children aged 10-17 said that their school taught them about debt and money management
For more information or interviews, please call The Children’s Society media team on 020 7841 4423 or email. For out-of-hours enquiries please call 07810 796 508.
Notes to editors
- Payday lenders will be forced to place ‘risk warnings’ on television adverts as part of a clampdown on lending practices that comes into effect tomorrow.
- The Children’s Society wants to create a society where children and young people are valued, respected and happy. We are committed to helping vulnerable and disadvantaged young people, including children in care and young runaways. We give a voice to disabled children, help young refugees to rebuild their lives and provide relief for young carers. Through our campaigns and research, we seek to influence policy and perceptions so that young people have a better chance in life.
- The Business Innovation and Skills Select Committee recommended the government impose such a ban on pay day loan companies advertising during children’s programming in 2013.
- The Children’s Society offers debt advice and support to families in financial difficulty though it’s children’s centres. Some of these families rely on high-cost credit to cover the basics, and are then faced with huge interest repayments that reduce the money left over for essentials like heating or food.
- The Ofcom research is from Trends in Advertising Activity: Payday Loans.