Given her history, Kerry Katona seems an odd choice to front a marketing campaign for a payday loans company. And it seems the advertising watchdog agrees, as it has deemed the Cash Lady TV ads ‘irresponsible’.
Declared bankrupt in 2008, former Atomic Kitten Kerry Katona is no stranger to money worries. With that in mind, the Advertising Standards Authority (ASA) has slammed an advert featuring the star for payday loans company ‘Cash Lady’.
The ASA concluded that some viewers ‘may have inferred from the advice given by Kerry Katona that the Cash Lady loan was advisable for those already having financial difficulties.’
Fast cash for fast debt
As far as I’m concerned, Cash Lady’s advertising slogan – ‘fast cash for fast lives’ – typifies one of the key problems in the payday loan sector. There’s too much emphasis on speed over cost, affordability and responsible borrowing.
This was reinforced by Kerry’s voiceover: ‘You could see your bank and fill in loads of forms, but there is an easier way to get a loan. With Cash Lady, it’s simple to apply for up to £300. It’s dead fast too.’
Even today, the homepage of the Cash Lady website says the only information you need to apply is your contact details, salary and bank details. There’s no mention of existing debts or your weekly expenditure, so it’s hard to see how the company can assess the true affordability of your loan. And this is a real problem for borrowers. In our survey, 48% of payday loan users had taken out credit in the past that it turned out they couldn’t afford to repay.
According to the ASA, Cash Lady’s adverts didn’t make clear that the loans of up to £300 should only be used as short-term stop gaps, not as a solution for more serious financial problems.
From prawns to payday loans
Irresponsible advertising like the Cash Lady ads encourages unaffordable borrowing, and does no favours to an industry desperate to improve its battered reputation.
And the problem isn’t restricted to Cash Lady. Our research last year found payday loan companies advertising loans for nights out or even ‘to put in the bank for emergencies’. One lender still claims that a payday loan can help you ‘solve all your money problems’. But when a loan costs you up to £29 a month in interest for every £100 you borrow, we think this is dangerous advice.
With our latest Consumer Insight Tracker data revealing that five million UK households used credit or savings to cover their spending on food last month, it’s ironic that Kerry Katona has gone from advertising Iceland’s prawn rings to Cash Lady’s payday loans.
Given her own past problems, a more responsible message might have been ‘Mum’s gone to get some debt advice’.