A committee of MPs has called for a ban of payday loan adverts shown between children’s TV shows.
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The Business Innovation and Skills select committee released a report on the matter on 20 December.
The report underlines that consumers are particularly likely to use payday loans and the high rates charged by lenders during Christmas time, as budgets are stretched to the limit. According to the report, children are exposed to the idea that loans were "fun, easy and an appropriate way to access finance."
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By GlobalDataChair of the committee Adrian Bailey MP said that the sector is in: "urgent need of overhaul" and tighter regulation, especially around affordability checks and rollovers. MPs also called for health warnings to be shown when people take out loans online in order for them to know the amount that they will have to repay.
A spokesman for Wonga, said that they co-operated closely with MPs during the reporting process and called the idea that Wonga advertises on children’s TV a "myth" adding that: "We have a strict, long-standing policy not to advertise in this way".
Stella McCreasy MP, making reference to the 2,235% increase of payday loans adverts on TV said: "That the evidence also shows how many under 16s have been subject to these adverts and that half of these averts were shown during daytime hours also highlights that they can’t be trusted when they say they don’t target children."
The Financial Conduct Authority, that will take over payday lending regulation in April 2014 is also involved in a consultation on finding an appropriate cap for the total cost of payday loans, following a proposal launched by the government on 25 November.
The payday lending sector is also undergoing an investigation by the Competition Commission.
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UK payday lenders to face tougher regulation under the FCA
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