WEEKLY INDUSTRY RECAP: WEEK ENDING 13 JAN 2013
Believe it or no, but famous spendthrift Kerry Katona has been tapped to represent a payday advance lending company in their television advert campaign.
It seems completely counter-productive to enlist the aid of a former bankrupt to convince people to use your instant cash loans service, but that’s exactly what payday loan provider CashLady is doing in running the advert campaign on television. Katona, who famously lost fortunes of money – and had her house repossessed – in the wake of neglecting to pay her tax bill in 2008. Yet somehow using someone that has demonstrated in the past that she’s completely irresponsible when it comes to money was a good marketing idea.
In Katona’s defence, she has gone on to admit in interviews that she was terrible with her money and has since reformed her profligate ways, remarking that she now no longer uses lending such as credit cards to purchase items and insists on using cash – and not indulging in things for herself that she doesn’t need. Excellent words to live by indeed – if she wasn’t exhorting people to take out payday lending that can cost as much as 2,760 per cent in annualised interest, that is.
Still, CashLady – Katona’s new paymaster – says that it is committed to being a ‘responsible payday lender,’ which it hopes to accomplish by not charging nearly as much as some of the bigger lenders in he market. Industry leader Wonga for instance can charge as much as 4,214 per cent APR to its customers, which is admittedly much worse than what CashLady is charging.
The newer, smaller payday lender also says that it wants to make sure lending terms are transparent and known to borrowers before any loan agreement is struck. This is of course a rather admirable goal, provided CashLady is being sincere and honest and not just telling us what we want to hear – never forget that payday lenders are all out to make money off their borrowers, so how much can you really trust someone who’s trying to make a profit off of your own personal financial distress?