Television adverts for payday loans companies were shown 397,000 times in 2012, according to a report by media regulator Ofcom.
Since 2009, the industry’s television exposure has increased by 64%, soaring from 11,000 adverts to almost 400,000 shown in the space of three years.
Ofcom also found that children aged between four and 15 saw payday loans adverts 596 million times, with the average child viewing 70 such adverts each.
Payday loans ‘prey on poor’
Citizens Advice chief executive, Gillian Guy, has accused payday lenders of “unashamedly” using advertising to “prey on poorer households” and young people.
“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 said.
However, the Consumer Finance Association (CFA), which represents the major payday loans lenders, such as QuickQuid, said that “viewing an advert doesn’t equate to a loan approval”.
CFA chief executive, Russell Hamblin-Boone said: “CFA members do not target any specific group of people and certainly not children, either through advertising on children’s TV channels or through using childish mascots.”
Impact from payday loans ads
According to Ofcom’s analysis, in 2008, there were 12 million ‘impacts’ – or number of times an advert is seen – among adults for payday loans adverts. By 2011, this figure had reached 4.2 billion and grew to 7.5 billion impacts in 2012.
In 2012 payday loans adverts accounted for 0.8% of all television advertising seen by adult viewers. Each adult saw an average of 152 payday loans adverts on television last year.
uSwitch personal finance expert, Michael Ossei, wonders if the increased pressure placed on the payday loans industry in 2013 will change Ofcom’s figures.
“Payday loans adverts on children’s programming may have been high in 2012 but it will be interesting to see whether Ofcom’s numbers come down in 2013 following the pressure placed on payday loans companies this year,” he said.