Members of the House of Lords will today decide whether to ban companies from advertising payday loans on primetime television.
An amendment to the Consumer Rights Bill, supported by The Children’s Society, would prevent firms from advertising their loans on TV and radio before the 9pm watershed.
A second amendment would stop companies from cold calling people to offer them payday loans.
In a survey carried out earlier this year for The Children’s Society, 74% of British parents said they wanted payday loan companies to be banned from broadcasting TV and radio adverts to children.
Today’s amendments have been tabled by the Bishop of Truro, Lord Alton (Crossbench) and Lord Mitchell (Labour).
They said: “Most people would agree that children should learn about borrowing and debt from their school and family – and not from irresponsible payday loan advertising. That’s why the law should be changed to ban these adverts from TV and radio before the 9pm watershed to minimise the risk of children being exposed to their messages.
“There are already restrictions to protect children from adverts for gambling, alcohol, tobacco and junk food. It is now time we curbed the companies offering loans for very high annual interest rates. When the Consumer Rights Bill is debated in the House of Lords we hope fellow peers will support our amendment to make it a reality.”
An online YouGov survey of children aged 13-17, carried out for The Children’s Society, found 72% had seen or heard an advert for payday loans in the last seven days.
The name recognition of payday loan firms among teenagers is extremely high, with 93% knowing at least one of eight top payday loan companies. More than half of children (55%) were able to recognise at least three lenders.
One third (34%) of children surveyed found payday loan adverts to be fun, tempting or exciting – and this group were significantly more likely to say they would consider using a payday loan in the future.
Meanwhile one third (34%) of parents surveyed online by YouGov believe payday lenders’ adverts deliberately target children. And more than one quarter (27%) think the companies put pressure on children to pester their parents to borrow money.
Matthew Reed, chief executive of The Children’s Society, said: “Through our front-line work we see first-hand the devastating impact of debt on children’s lives. We know it’s become a daily battle for families to pay the bills, meet the mortgage or rent payments, and find money for food or other basics. One setback or even a simple mistake can lead to a spiral of debt.
“Right now children are being exposed to a barrage of payday loan adverts, which put even more pressure on families struggling to make ends meet and to provide the very basics for their children. That’s why the law should be changed to ban these ads from TV and radio before the 9pm watershed.
“It is crucial that children learn about borrowing and money from their school and family – not from irresponsible payday loan advertising. A significant majority of parents back a ban and it’s now time for the Government to act.”