Member Article

Say no to payday loans comment

By Iain Sim

Chief Executive, of Coast & Country

Nearly eight million people in the UK, about 17% of the population, have no access to mainstream financial products. Their lives are made more difficult and their financial situation more precarious as services such as bank accounts, insurance and affordable credit are out of their reach.

Many of these people are tenants of social landlords around the UK. They are financially excluded from the rest of the population and are the primary target of mass advertising campaigns being waged in all media by the ubiquitous payday loan providers.

Coast & Country is busy preparing its tenants for a number of financial shocks relating to benefit reforms; changes that could have a direct effect on the bottom line of any social landlord in terms of the prospect for increased rent arrears and the associated costs of dealing with tenant enquiries as the new system beds in. Therefore, any action that can be taken to head off further financial hardship among our primary client groups should be seen as an investment in our own financial well-being.

The month of January is a particularly lucrative time for organisations offering short term high interest loans. We carried out research with ICM and found that more than thirteen million people in the UK were paid before Christmas and received their next pay at the end of January; a gap of almost six weeks between payslips. The key date for money running out was 24th January - the day we labelled ‘Payday Loan Danger Day’.

Wonga portrays itself on TV with cute animated grannies. We portrayed the industry as sharks circling and ready to exploit January’s moment of maximum financial weakness. We felt our tenants were entitled to the other side of the story.

The TV adverts suggest it only takes 15 minutes to take out a payday loan, but with interest rates in excess of 4,000%, people who took out a loan without proper advice could spend a lot more time regretting in.

Our campaign was hard hitting; with a graphic poster image, coverage on radio and in newspapers and hundreds of face to face contacts between our tenants and our team of financial advisers. We didn’t just hit out at payday loan sharks, we also offered common-sense alternatives; starting with advice on budgeting and then discussing availability of community banks or credit unions.

We started our campaign when we considered the business implications of the growth of indebtedness among our tenants. At a time when so much will change in the financial circumstances of our tenants we have a real stake in helping those who are financially excluded to make rational and workable decisions about their money.

This was posted in Bdaily's Members' News section by Recognition PR Business Team .