A payday loan advert which featured former bankrupt Kerry Katona has been banned by the advertising watchdog after it was ruled “irresponsible”.
The Advertising Standards Authority (ASA) received 30 complaints about the 30-second TV advert for short-term credit broker Cash Lady.
Of those complaints 29 challenged whether it was irresponsible because it focused on Katona’s financial problems and encouraged people in similar situations to borrow money.
In the ad, TV personality Katona said: “We’ve all had money troubles at some point, I know I have. You could see your bank and fill in loads of forms, but is there an easier way to get a loan… with cash lady it’s simple to apply for up to £300.
“It’s dead fast too. If you’re approved, the money goes straight into your account.”
PDB UK, which trades as Cash Lady, said that their customers were likely to be experiencing “money troubles” as the product is intended to meet short term, urgent and “unexpected” financial needs.
The company argued that Katona was chosen as the face of the brand because she had experienced financial problems in the past.
But the advertising watchdog considered that the claim “fast cash for fast lives” could be taken by some viewers to mean that the payday loan would help fund a celebrity lifestyle.
The ASA also took issue with the way in which the ad promoted Cash Lady as an alternative to banks, while offering an APR in excess of 2,000%, and ruled that it was “misleading”.
In a statement, the regulator said: “Although we understood the loans were intended for short-term repayment compared to some longer term bank loans, we considered that the presentation of the ad did not make this clear and that it implied that for loans of up to £300, it was more convenient and desirable for those in financial difficulties to obtain credit through Cash Lady than through a high street bank loan.
“For this reason we concluded that the ad was irresponsible.”
It ruled that the advert should not appear in its current form and Cash Lady has been told to “take care” with the overall presentation of its loans.
A spokesman for PDB said that the firm is “surprised and disappointed” by the ASA’s decision.
They added: “We do not feel that a £300 loan is enough to fund a celebrity lifestyle or get someone out of bankruptcy, and nor do we think anybody seriously feels that this is what we were advertising. However, if this is the ASA decision, we accept it.
“Our website gives lots of clear information to anyone who wishes to apply, and we’ve got some of the clearest responsible lending guidelines in the industry, so we pride ourselves on being a responsible broker.”
Katona was declared bankrupt in 2008 owing around £1m to HM Revenue & Customs. Her and her mother were both evicted from their homes.
By Ellie Duncan