Why on earth did the Katona pay-day loan ad get banned?

"Fast cash for fast lives" comes under ASA's watchful gaze.

Ex Atomic Kitten star Kerry Katona recently made headlines once again for being a minor celebrity without much cash. This time, the Advertising Standards Agency (ASA) has banned payday loan company Cash Lady’s advert starring Katona, as it could be seen as "irresponsible".

Payday loan companies, such as Cash Lady or Wonga, offer high interest loans intended to be paid back on the day of your next pay check. Cash Lady offers loans of up to £300 a month with an annual percentage rate of 2,760. For example, if you borrow £200 from Cash Lady for 28 days you will pay back £258 on payday.

It’s no secret that payday loans are often seen as a slippery slope; borrowing £200 and paying back over 125 per cent of that can’t exactly be seen as responsible money management. However, it is also true that sometimes payday loans may be, to those who use them, the only way out of a sticky situation.

Why did the ASA ban the advert, I hear you cry. Everyone knows the sky high nature of payday loan interest rates and that Kerry Katona has herself had money problems (she was declared bankrupt in 2008 for failing to pay her tax bill). Cash Lady claimed they chose Katona because the public could relate to her, making her a face a beacon of hope.

However, the problem the ASA had with the advertisement featuring Katona wasn’t so much a problem with the “star” but with the branding of Cash Lady. The advert stated that the payday loan company provides "fast cash for fast lives", which may purport to the public that the payday loan option isn’t only for emergencies but also can be used to fund a "fast life," like that of Katona’s.

Advertising is often sexy, it’s often weird and quirky, and it needs to be eye catching but most of all it needs to appeal to the audience. "Fast cash for fast lives" certainly appeals to those who need money to quickly sort out their problems – however, with the face of a celebrity one can see how the ASA could see it as problematic to allow an advert that showed a short term solution to what is sometimes a more long term problem with celebrity endorsement.

I doubt it will be long until payday loan companies are asked to attach a warning to their adverts akin to those on alcohol adverts. After all, payday loans can become an addiction. 

Kerry Katona. Photograph: Getty Images

Katy Maydon is a journalist for Retail Banker International

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Lord Sainsbury pulls funding from Progress and other political causes

The longstanding Labour donor will no longer fund party political causes. 

Centrist Labour MPs face a funding gap for their ideas after the longstanding Labour donor Lord Sainsbury announced he will stop financing party political causes.

Sainsbury, who served as a New Labour minister and also donated to the Liberal Democrats, is instead concentrating on charitable causes. 

Lord Sainsbury funded the centrist organisation Progress, dubbed the “original Blairite pressure group”, which was founded in mid Nineties and provided the intellectual underpinnings of New Labour.

The former supermarket boss is understood to still fund Policy Network, an international thinktank headed by New Labour veteran Peter Mandelson.

He has also funded the Remain campaign group Britain Stronger in Europe. The latter reinvented itself as Open Britain after the Leave vote, and has campaigned for a softer Brexit. Its supporters include former Lib Dem leader Nick Clegg and Labour's Chuka Umunna, and it now relies on grassroots funding.

Sainsbury said he wished to “hand the baton on to a new generation of donors” who supported progressive politics. 

Progress director Richard Angell said: “Progress is extremely grateful to Lord Sainsbury for the funding he has provided for over two decades. We always knew it would not last forever.”

The organisation has raised a third of its funding target from other donors, but is now appealing for financial support from Labour supporters. Its aims include “stopping a hard-left take over” of the Labour party and “renewing the ideas of the centre-left”. 

Julia Rampen is the digital news editor of the New Statesman (previously editor of The Staggers, The New Statesman's online rolling politics blog). She has also been deputy editor at Mirror Money Online and has worked as a financial journalist for several trade magazines. 

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