Kerry Katona Payday Loans Advert Banned

May 16, 2013

Luke-Notley small (Custom)A TV advert featuring formerly bankrupt star Kerry Katona has been ruled as irresponsible by the Advertising Standards Agency (ASA), who received 30 complaints about the ad saying it should be banned as it focused on Katona’s former financial difficulties and was encouraging people with their own financial problems to borrow money.

Katona, who was declared bankrupt in 2008 after failing to pay a tax bill, says in the 30-second ad for Cash Lady, “We’ve all had money troubles at some point, I know I have. You could see your bank and fill in loads of forms, but is there an easier way to get a loan … it’s dead fast too. Fast cash for fast lives.”

PDB UK, who trade as Cash Lady, said that Katona was chosen precisely because she has had money problems, as customers would be able to “relate to her”.

It said the ad was not irresponsible as it did not make a direct reference to her bankruptcy. It also stated that its loans were limited to £300 and were aimed at those experiencing relatively low-level short-term financial difficulties.

However, the ASA said the advert was misleading and irresponsible because it promoted itself as an alternative to banks while offering an APR in excess of 2,000%, information that should have been more prominent in the ad.

The advertising watchdog also said that the strapline “Fast cash for fast lives” could be taken to mean that payday loans could be used to fund a high-flying lifestyle.

PDB UK disagreed, saying that its “fast cash for fast lives” strapline referred to the more convenient, flexible service it offered to people with busy lives compared with visiting a bank for a loan.

The ASA banned the ad after deciding that ultimately it was irresponsible and misleading, and that it failed rules on social responsibility.

“We considered that references to [Kerry Katona’s] financial problems alongside the presentation of the ad more generally had the potential to encourage vulnerable viewers with financial problems and/or restricted credit from seeking to resolve them through the payday loan service and concluded that the ad was therefore irresponsible.”

A spokesman for Cash Lady said they were “surprised and disappointed” by the ruling but accepted the ASA’s decision.

“We recommend that payday loans should only be used for emergencies or unexpected expenses, and we will make that point much more clearly in future adverts.”

The payday loan industry is currently being investigated by the Office of Fair Trading following a review, and three lenders have already lost their licences.

Fifty payday lenders inspected have until May 28 to prove they have changed their trading practices or risk losing their licence.