An ad from payday lender Peachy.co.uk has been criticized by the watchdog for encouraging people to stockpile food for Brexit using loans.
The lender, who has an average APR of 720%, makes loans between £ 100 and £ 1,000 to cash-strapped Brits who will be repaid within a year.
But the Advertising Standards Authority (ASA) called one of its emails to customers “irresponsible” and banned it from appearing again.
He says the ad was likely to put “emotional pressure” on borrowers, causing them to take out loans they couldn’t afford or risk not being able to feed themselves or their families.
He adds that he played on the “fear” surrounding Brexit, in particular the uncertainty over the availability of essential products and general economic stability after the UK’s exit from the European Union.
The ASA is concerned that this may have worried financially vulnerable people who are already struggling or worried about their financial situation.
How to reduce the cost of your debt
BEING in a lot of debt can be really worrying. Here are some tips from Citizens Advice on how you can take action:
- Check your bank balance regularly – knowing your spending habits is the first step in managing your money
- Calculate your budget – write down your income and take out your essential bills such as food and transportation. If you have money left over, plan ahead what to spend or save. If you don’t, look for ways to cut your costs.
- Repay more than the minimum – if you have credit card debt, try to pay off more than your minimum credit card amount each month to lower your bill faster
- Pay your most expensive credit card sooner – If you have multiple credit cards and can’t pay them off in full each month, go for the more expensive card (the one with the highest interest rate)
- Prioritize your debts – If you have several debts and you cannot afford to pay them all, it is important to prioritize them. Your rent, mortgage, council tax, and energy bills should be paid first because the consequences can be more serious if you don’t pay.
- Take advice – If you are struggling to pay off your debts month after month, it is important that you get advice as early as possible, before it accumulates more. Organizations such as Citizens Advice and National Debtline can help you prioritize and negotiate with your creditors to provide you with more affordable repayment plans.
The ad, which was sent in January, read: ‘Let’s be honest here, nobody really knows what’s going on with all this Brexit malarkey … it should happen soon and some say it could affect the amount of food available.
“After all, about half of the fresh food we eat is imported…
“We don’t want to believe that Brexit will impact the amount of food available, but it’s always a good idea to have a small stock ready. This way you are always prepared for the worst …
“Things can come up even when you think everything is going well… This is when you might need a little extra help. “
ASA couldn’t tell us if anyone took out a loan upon seeing the ad but felt that the content alone was enough to impose a ban.
Peachy.co.uk, which is owned by Cash On Go, told the ASA the reference to Brexit was included to make the announcement relevant and believes it was mentioned lightly.
The short-term lender adds that he is “sorry to hear” that the campaign was not performed as expected.
The Sun has asked Peachy.co.uk if they want to send us a response directly and we will update this story if we get one.
It comes after a huge jump in Britons taking out payday and short-term loans in the past 12 months.
Payday loan broker Quick Loans, which charges up to 1,575% interest, even wants people to go to JAIL to get into debt.
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