One provider of short term loans has recently gotten itself into hot water after it ran an advert suggesting that borrowers could fund their Diamond Jubilee celebrations by taking out payday loans – a move that has seen the company branded as ‘irresponsible.’
Payday advance lender Payday Bank said in an advert campaign coinciding with the Jubilee that the once-in-a-lifetime celebration was a ‘perfect opportunity’ for taking out an instant cash loan with the company. The annualised percentage rate on the loan it offered equated to £1,737 per cent, which works out to £45 in payable interest on a 28 day loan of £180, raising the entire cost of the loan to £225.
Debt advice charities and consumer campaigners were quick to condemn the advert, which appeared on Payday Bank’s website,where it suggested borrowers keep the mood festive by throwing parties, making bunting with their children, watching the celebrations on television, or heading to the capital to watch it in person from the banks of the Thames. However, the blog entry on the company’s website was taken down in a hurry after Payday Bank was confronted on it by the BBC, with one company spokesman stating that the lender agreed that the contend was unacceptable, adding that it didn’t live up to the standards of Payday Bank’s responsible brokering and lending practices.
The blog post in question had actually not been written by a Payday Bank representative but a contract worker, the representative also said. The lender took full responsibility for not maintaining a closer watch on the contract worker’s final product.