The issue of Pay Day Loan companies and the impact they have on the poorest in society is huge but possibly not immediately obvious to all.  There is a lot that needs to be done and I would like to see the Government take a number of steps, including capping the levels of interest rates that can be charged for lending.  A representative APR of 5853% is simply not acceptable.

Another important change is to stop Pay Day Loans being advertised before the watershed so that children’s financial awareness and education is not influenced by  these companies. The Children’s Society believes that children should receive their financial education from their family and school and not from glossy advertising.  I absolutely agree! Not everyone has the benefit of being financially aware and more needs to be done to support them.

The Children’s Society conducted a survey that revealed that 3/4 teenagers had seen a pay day loan advert in the last week.  Children are already using words like ‘fun’, ‘tempting’ and ‘exciting’ to describe these adverts.  These children are the borrowers of tomorrow.

Why is this such an issue?  

One simple mistake can plunge a family into spiralling debt.  A loan taken out as a quick fix can soon spiral out of control if they find they are unable to pay it back within the terms agreed.  Even if they can pay it back, the cost to that family is still significant.

Screenshot 2014-10-08 10.13.59

 

This show’s that a £400 loan taken out for a period of 30 days will cost a family £127.15 which in its self is extortionate.  If they don’t meet these agreed terms the cost will rise significantly.  This is also at least £127.15 taken out of the household income that can now not be spent on:

  • Rent/Mortgage
  • Food
  • Utility Bills including Heating
  • School Meals
  • School Uniform and Equipment
  • School Outings

For a low income family, £127.15 will make up a large percentage of their monthly disposable income.  In some cases it could be all of it.

Not only is this money taken out of the families pocket, it is now taken out of the local community and feeding the huge profits of the companies selling these loans. This has a wider impact on local business, housing providers and the local community.

Please Act Now And Support The Campaign!

The Children’s Society are running a campaign to help end the effects poverty has on children.  The Debt Trap is a real issue in this country and more pressure is needed on Government to address the impact.

There is an important opportunity on the 13th October to Ask A Peer to vote to end Pay Day Loan advertisements before the watershed.  Please act now and help spread the message on social media and urge the Government to take action.

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21 COMMENTS

  1. I think the pay day loans business is disgusting, ripping off those who have no alternative. I have done the ask a peer thing, great campaign,

  2. I’m always shocked that they can get away with charging such crazy amounts of interest. I can’t imagine being so desperate you have to use it. And advertising before the watershed – makes me so glad we don’t have TV!!

  3. I think the world is slowly wising up to advertising and the effects it has on our youth. Hopefully this is the next thing to be banned. Shocking that they get away with it still!

  4. There’s a lot that shouldn’t be shown during children’s advertisements. I think they are right in the move of not giving these loans to people who cannot afford to pay them back.

  5. I think advertising aimed at kids should be banned full stop, but this is a more sinister campaign which only serves to line the pockets of those lending, and doesn’t help those in need at all.

  6. It is absolutely criminal that these companies are allowed to operate at all, let alone get away with marketing to kids. I despise how these vultures prey on society’s weakest and poorest. Thank you for writing such an eye opening post lovely!

  7. I whole heartedly support this campaign. I have shared on my G+. I am surprised that their are not strict regulations limiting the amount of interest they can charge. #sharewithme

  8. I think it is very important that children learn about managing finances at an early age. Not by thinking money is easily available when you want it.

  9. Good for you for helping spread the word. I had absolutely no idea what a great cause you are backing. I think it’s important to teach our kids as earlier as possible about money management. It’s a real problem it seems in the generation under us. Thanks for linking up to Share WIth Me keep up the great work hunny. #sharewithme

  10. Well done for bringing this to the attention of many and explaining the consequences of taking one out. It is unbelievable the extortionate interest on these types of loans. I think people and the government are starting to wise up – with one pay day lender forced to wipe off thousands of customers debts earlier this month – but more needs to be done to stop these ‘sharks’ – preying on the poorest sector of society. It’s also very scary to think of the impact their adverts have on children. Thanks for sharing. #pocolo

  11. I’d never really thought about it this, but it’s very true. Especially since the advert can appeal to children by having funny puppets on it. xx

  12. What a fantastic message! Pay day loans are extortionate and I agree more should be done to stop them charging so much. I hadn’t even thought about the effect on teens seeing these ads – well done for raising awareness of this!
    Debbie

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