PAYDAY lenders should be banned from advertising on children's television to stop young people being bombarded by messages that getting money this way is "fun" and "easy", MPs have urged.
The Business, Innovation and Skills (BIS) Committee has recommended pulling the plug on such advertising on programming aimed at children after hearing fears that the next generation is being "groomed" to such borrowing and evidence that the average child aged between four and 15 was exposed to 70 payday loan adverts last year.
Recommendations also included tackling nuisance emails and texts to people who are "at their lowest ebb" with offers of expensive loans, forcing lenders to contribute cash to debt advice and making them improve the way they share information with each other to stop struggling borrowers from taking on multiple debts.
MPs heard from consumer campaigners who warned that "cartoon puppets" used on payday lenders' adverts suggest that taking out a loan can be fun.
Martin Lewis, founder of MoneySavingExpert.com, previously told the MPs that the next generation is in danger of being groomed for payday loans. He said he is "delighted" with the MPs' recommendation.
"We know children ask their parents to get a payday loan to buy them toys. Whilst parents have the power to say no, it's evidence that kids see this dangerous type of niche borrowing as part of everyday life," he said.
A Wonga spokesman said it was a myth that it advertises on children's TV, adding: "We have a strict, long-standing policy not to advertise in this way."
Wonga is well known for its TV ads featuring elderly puppet characters who explain the process of taking out a short-term cash loan to viewers.
The Consumer Finance Association (CFA), whose members include The Money Shop, Quick Quid and Cash Converters, also said its members do not advertise for child viewers.
Committee chairman Adrian Bailey said: "It is worrying that our children are being exposed to such an extent to adverts that can present payday loans as a fun, easy and appropriate way to access finance. Children's programmes are simply not an acceptable place for payday loan adverts."
The rapid expansion of the payday firms and a rocketing number of calls for help being made to charities by people drowning in debt are "not unrelated", he said.
The committee called for a levy paid by payday firms, under regulatory requirements, to be ringfenced by the Money Advice Service. This money could be used to boost the provision of debt advice to struggling borrowers.
The estimated size of the payday loan sector has doubled over a five-year period to be worth around £2.2 billion.
The Office of Fair Trading (OFT) has referred the industry to the Competition Commission which will report next year.
The number of payday ads seen by children soared from three million in 2008 to 596m last year, meaning that in 2012 each child typically saw 70 of these ads.
Peter Tutton, head of policy at StepChange Debt Charity welcomed the call, saying: "Ensuring that firms share data in real time will help to prevent multiple payday loan use and the spiral of debt that can result."
The Financial Conduct Authority (FCA) plans to crack down on the sector when it takes over its regulation next year.
A Treasury spokesman said: "Alongside the tough measures the FCA has proposed to curb rollovers and ensure responsible lending, we have asked the FCA to set a cap on the cost of payday loans to protect consumers from excessive rates and charges."
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