Government will not ban daytime payday loan adverts

The government has rejected calls to ban payday loan adverts from being aired during children's television.

Ministers had been urged by the Business, Innovations and Skills Select Committee to stop the promotions appearing during the daytime, after it emerged children watched around 596 commercials for short-term lenders in 2012. This was an average of 70 per child and a rise of 21.8 per cent against the previous year.

The group was also concerned borrowers did not seem to understand the full potential impact they could face if they failed to make their instalments on time. In addition, it stated lenders did not make it clear enough that credit ratings could be seriously affected if they did not pay back their loan.

However, the government stated although it was concerned by the increase, payday loans adverts still only comprised of around 0.6 per cent of commercials seen by children aged between four and 15. It added lenders were already subjected to stringent content rules, meaning a blanket ban was not necessary.

In addition, the Financial Conduct Authority (FCA), which will take charge of the credit industry from next month, has consulted on new rules government adverts for lenders. These include businesses having to display mandatory links to debt advice organisations and warnings outlining the consequences of failing to pay back loans. The regulator stated current information should also be shorter and sharper. 

The organisation said it would monitor digital, broadcast and print advertisements from April 1st, to make sure they comply with its rules. Repeat offenders who fail to meet these standards could be made to sign an official declaration to state they have adequate governance in place for the approval of compliant material. 

Meanwhile, the FCA also claimed it was not best placed to discuss the possibility of a ban on daytime adverts. It pointed out any such enforcement would have to comply with Article 10 of the European Convention on Human Rights, which protects freedom of expression. 

By Amy White