“Irresponsible” payday loans company advertisement spotted in York nightclub

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High interest ‘pay-day’ loans targeting students now being advertised at a popular York nightclub have been branded “irresponsible” and “exploitative”.

The YUSU President has also attacked the advertising, urging students  to avoid short term loan companies.

A poster for Smart-Pig.com, which offers loans with a representative 1084 per cent APR, was spotted in Kuda nightclub on an official University of York club night.

Second-year History and Politics student Jay Khan, who discovered the advert, said: “it just made me so furious.”

“The placing of the advert in this particular setting was irresponsible.”

Earlier this year, the Advertising Standards Authority ruled another Smart-Pig.com advert on a beer mat breached advertising codes for irresponsibly targeting students by associating short-term loans and drinking alcohol.

A member of the public complained at the time that the advert “irresponsibly targeted students who were likely to be managing debt already.”

Derwent College second-year student Freya slammed the advert saying: “This is ridiculously exploitative. The advert takes advantage of people when they are most vulnerable i.e. drunk.”

The 1084 per cent interest rate of the loans rival that of other payday loans providers, with Wonga offering an annualised interest rate of 1,509 per cent.

Smart-Pig.com said: “We expect that your student’s comment is driven by the perceived price of our loans given by the APR.

“Despite the high APR, a £100 smart-pig loan will cost between £2.00 and £5.60 per week depending on how long it is for (up to 25 weeks).”

The loans company went on to say: “cheap, instant emergency credit is very useful to students from all backgrounds.”

Peter Quinn, the Director of Student Support Services, advised that ‘these loans can make money problems much worse over time and are best avoided.’

He also said that students can contact the Student Support Hub for advice on ‘a wide range of money issues from student loan questions to debt counselling.’

Smart-Pig.com was set up by two students in 2012 and was supported by the government funded Start-Up Loans scheme, where they had to pay a more manageable 6 per cent interest per annum.

Despite admitting they are “still more expensive than many forms of traditional borrowing” on their website, the company tries to explain why a short-term high interest loan may be preferable to a student overdraft extension at a bank, despite going on to admit student overdrafts are free.

YUSU President Ben Leatham said: “First of all I would like to thank York Vision for drawing our attention to this issue.

“In response, we’ve made representations to our partners, Kuda, to encourage them to reconsider this advertising.

“This issue draws attention to the cost of the living crisis our students face, which as YUSU officers we have passionately engaged with on a local and national level.

“What’s important to highlight is that there are a range of options available to students facing financial hardship within YUSU and the university.

“We urge all students not to resort to payday lenders.”