Provident Financial has been accused of dragging the payday lending industry to a “new low” by sending an advert for high-cost credit featuring faces of children and babies that was sent to financially vulnerable people before Christmas.
Rachel Reeves, chair of the Commons business committee called on the City watchdog to investigate the payday lender's “cynical” marketing which offered loans at an APR of 535.3 per cent.
Provident, which owns Vanquis Bank and Moneybarn, sent a mailshot depicting a smiling child wearing a Christmas cracker hat, children decorating their grandfather with tinsel, and people hugging with the words: “It wouldn't be Christmas without ... the look on her face ... decorating grandad ... and visiting loved ones.”
Ms Reeves expressed concern “about the behaviour of credit provider Provident which cynically used the intense pressure on household finances over Christmas to target vulnerable customers. I believe this was a cynical tactic to exploit vulnerable people who struggle financially at the best of times, let alone over the festive season,” Ms Reeves wrote. “Provident tried to tug on the people's heartstrings with a deliberately emotionally-loaded message to urge them to take out a loan at a tip-off rate of interest.“
The Advertsing Standards Authority (ASA) last week ruled that the advert was irresponsible. The ASA, which is funded by advertisers, does not have the power to fine companies.
Last year, Provident was ordered to pay a £2m fine and £169m to 1.2 million Vanquis customers for selling an add-on product called a Repayment Option Plan (ROP) which was not fully explained.
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