ASA and government working together to crack down on Payday loan advertising
The Advertising Standards Authority (ASA) is working with the government and the industry to make changes to the way payday lenders can advertise.
Under the new regulations, payday loan companies cannot tempt consumers into taking out payday loans that they can’t afford, and restrict the number of adverts firms put out per hour and the times they can advertise.
Payday lenders, offering short term loans with high interest rates, will also be required to make sure that interest rates are clearly displayed.
The crackdown on payday advertising comes following an Office of Fair Trading report into 50 major lenders, finding that there was "widespread irresponsible lending".
OFT chief executive Clive Maxwell said: "We have found fundamental problems with the way the payday market works and widespread breaches of the law and regulations, causing misery and hardship for many borrowers.
"Payday lenders are earning up to half their revenue not from one-off loans, but from rolled over or re-financed deals where unexpected costs can rapidly mount up."
Payday loan firms have been told they must implement changes to their advertising practices within 12 weeks or face being closed down.