The number of payday loan TV adverts has skyrocketed by a whopping 3,500 per cent, thanks in large part to payday lending firms increasingly preying on poor families with children, recent research shockingly reveals.
Wonga and other large firms have spent millions promoting short-term loans to families that are struggling in the midst of the economic downturn.
According to Ofcom, a telecommunications industry regulator, there were 11,000 TV payday loan adverts in 2009. However, only two years later in 2011, that figure had surged to 243,000. The trend continued last year as 397,000 adverts blasted TV viewers.
This has undoubtedly led to the massive increase in the number of people exposed to payday loan adverts, which jumped from 12 million adults in 2008 to 7.5 billion last year.
Of these, the Ofcom data suggest many of the targeted households were less financially well off. In fact, the average well off individual only saw 100 payday loan ads last year. Low-income adults, on the other hand, saw 203.
Children’s exposure to these adverts is even more disturbing to anti-payday loan campaigners as many are regularly exposed to ads selling loans that charge outrageous annual interest rates of 5,000 per cent or more.
The Ofcom report states that the average 15-year-old in the UK was exposed to 70 payday loan adverts in 2012. Furthermore, approximately three per cent of these ads appeared during children’s TV programmes. Other ads also regularly appear on popular music channels often viewed by teenagers.
The recent revelations come at a time when the Financial Conduct Authority is preparing for a clampdown on the payday lending industry when its new powers take effect in April.
“Payday lenders are unashamedly and irresponsibly using adverts to prey on poorer households in a bid to capitalise on the cost of living crisis. 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,” said Gillian Guy, chief executive of Citizens Advice.
“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,” she added.
According to general secretary Steve Turner, “This research paints a horrific picture of a generation of children and young people being groomed into a culture of debt. 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.”