The Advertising Association has waded into the row over payday loan firms, claiming local authorities are setting a “dangerous precedent” by banning them from advertising on council owned poster sites and computers.
Last month Plymouth Council became the first to outlaw the controversial lenders, while Islington Council has since followed suit. Now several others, including Cheshire East and Medway, are considering the move.
At the time, Plymouth Council cabinet member for community development Chris Penberthy said: “Plymouth’s advice agencies are taking calls daily from people who are running up huge debts that are causing stress and hardship to them and their families. We need to protect people and make it difficult for payday loan companies to operate in our city.”
The ban covers advertising on poster sites and bus stops within the council’s region, as well as blocking access to the 50 most popular payday loan websites across its entire computer network, including at libraries and community centres.
But the Advertising Association has warned that local interference in the £2bn market is short-sighted.
Chief executive Tim Lefroy said: “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.”
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