Plans by various councils to ban payday loan ads would set a ‘dangerous precedent’, the Advertising Association has today warned.
The warning comes after a report in the Financial Times found that Cheshire East and Medway councils, along with others, are looking to follow the lead of Plymouth council by banning ads from companies such as Wonga in its city centre hourdings.
The councils say they want to make the move because of the ‘immoral’ high APR, which can reach over 5,000 per cent.
However, Advertising Association chief executive Tim Lefroy spoke out against the plan, saying: “Payday loans have no shortage of critics, but their advertising is covered by two highly competent, well-respected national regulators. It is the ASA and OFT which are best placed to determine whether further attention is required.
“These moves would set a dangerous precedent. Outdoor advertising contracts represent millions of pounds invested in councils – keeping local taxes down, bus services cheap and street furniture in good condition. Limiting the potential return on that investment because a sector has become politically unpopular would undermine those arrangements, to the detriment of local communities.”
A Whitehall summit involving the Financial Conduct Authority suggested that payday loan advertising could be banned altogether.