Payday loan companies have spent more than £500,000 promoting debt deals on children’s television. In some cases the interest rates have exceeded 4,200% APR.
Adverts for short-term loans, known as payday loans, with interest rates as high as 4,214% APR, have been appearing on channels such as Boomerang, Cartoon Network and Nickelodeon, and between children’s television programmes on Channel 5.
Kids TV attracts loan ads
According to Which? Money analysis, QuickQuid, which charges between £20 and £29.50 a month for every £100 you borrow, spent the most on adverts on the three children’s TV channels – £292,108 between the beginning of November 2010 and the end of October 2012. Pounds2Day spent £80,361 over the same period.
Most payday loan companies reduced their advertising spend last year from 2010/11. QuickQuid, WageDayAdvance. co.uk and Wonga were the highest spenders on adverts shown on Channel 5 during the breakfast slots, at which time kids’ television programmes are aired.
Wonga told us that it has a policy not to advertise on children’s TV, but admits there’s a risk that adverts may inadvertently appear on mainstream channels during a children’s show, but stated that ‘this would never be our conscious intention.’
Which? view on payday loan ads
A Which? spokesperson said: ‘Payday lenders need to be more responsible about their advertising at any time of day and on any channel.
‘We want all lenders in the high cost credit industry to be clear and upfront about their fees and charges in all their marketing material, including television adverts.’
If you’re struggling with debt, take a look at our guide to what to do if you can’t pay back a payday loan.