Payday loan companies are officially banned from advertising on all council-owned property in Tower Hamlets, or setting up business in local authority property, following a vote taken on Wednesday evening.
Council members voted in favour of a petition presented by Citizen UK to ban payday loan advertising on billboards, bus shelters, public computers and council publications across the borough. The petition gained over 500 votes in the three weeks before it was presented to the council chamber by Nick Coke, the leader of Stepney Salvation Army and David Barclay of Bethnal Green’s financial advice service, Just Money.
Barclay said: “We are delighted with the result, it is a significant step for the council to take. We will be working with the council to keep the pressure on pay-day lenders in Tower Hamlets.”
Coke added: “We are very happy with the outcome and relieved to see there was cross-party support in the council and people were united about the issue. There was a lot of political will to take action.”
When Rachael Saunders and Labour councillor Anwar Khan proposed the petition to the council, there was unanimous support for the change in policy. Khan said: “This is an important issue that needs to be tackled, it’s making money from the poor and needy.”
“Quite frankly it’s unacceptable to put people in a spiral of debt that affects their life chances. The adverts create false impressions of support, but in reality trap people with excessive charges.”
A payday loan is a short-term unsecured money-lending system acquired from a private company rather than a bank. These loans generally charge a high interest fee, which mean the borrower obtains further debt if the loan is not repaid within the arranged time.
Just Money warns of the dangers of both payday loans and the excesses of their advertising campaigns. Coke said: “Lots of payday loan companies use inappropriate advertising campaigns. For example, in Tower Hamlets, payday loan company, Speedy Cash, has a large kangaroo mascot handing out flyers to children on the high street. This character looks cool and attracts attention but this is an inappropriate way to attract publicity and is the type of thing we need to work together to limit.”
In Wednesday’s meeting Tower Hamlets Council discussed the issue of payday loans’ increasing popularity over the Christmas period as low-income families struggle with increased pressure on their tight budgets. Although the council is only able to ban advertising on council owned property, they have promised to “limit the proliferation and impact of high street credit outlets in the borough.”
Barclay said: “If we do see payday loans coming up on private billboards, we will be able to work with the council to put pressure on these companies to remove their adverts.”
In addition to this, the council report “calls on the government to give local authorities the power to veto licenses for high street credit agencies where they would have negative economic or social impacts on communities.” Tower Hamlets council will also write to Boris Johnson to ask him to consider changing the Transport for London Advertising Policy to include a ban on payday loan advertising on public transport across London.
Likewise, Just Money have stated that: “This is just the first step and we’ve got a lot more work to do and will continue to move the campaign forward.” Payday lending has gained increasing attention since the government introduced plans to impose a legal cap on the overall cost of payday loans earlier in the week.
The news of the ban in Tower Hamlets comes as Lewisham council raises concerns over large payday debts in the borough.