Daytime TV ads are dangerous

Emma Lunn
by Lovemoney Staff Emma Lunn on 20 November 2012  |  Comments 15 comments

The TV ads during the day - and increasingly at night too - are filled with financial products that are bad for your financial health.

Daytime TV ads are dangerous

Have you had an accident that’s not your fault? Maybe you need some cash quickly or you’ve been mis-sold some PPI? If you watch daytime TV all these messages will be depressingly familiar.

In the old days, daytime TV ads used to be for toys and nappies to target stay-at-home parents but, on the mainstream channels at least, today’s TV ads all focus on arguably the worst kinds of financial products.

I admit as a freelancer I’m partial to a bit of daytime viewing: there’s nothing like a bit of Neighbours or Home and Away to break up the working day. But alongside homeworkers, shift-workers and the retired, a lot of people sitting at home during the day are likely to be students or unemployed – and perhaps more susceptible to some of the adverts’ messages.

Here’s why a lot of products advertised during the day are a bad idea.

Payday loans

Payday lenders such as Wonga, Quick Quid, Pounds2Pocket and Lending Stream are regular advertisers on daytime TV.

With APRs of over 4,000%, payday loans are rarely a good option for anybody, but they can be catastrophic for the unemployed or students who may not have the funds to repay their loans come “payday”.

The firms themselves claim the APR is irrelevant as loans are designed to be paid back quickly, not over a year, but it’s still an expensive way to borrow. For example, Wonga charges a total of £34.64 in interest and fees to borrow £100 for 28 days.

Some sub-prime lenders offer loans designed to be paid back over longer time periods. Lending Stream, for example, offers six-month loans at 3,378% APR while Pounds To Pocket sells year-long loans at 278% APR.

What's more, payday lenders are guilty of being very aggressive when it comes to claiming late payments. For more check out Payday lenders warned about ‘aggressive’ debt collection tactics.

High-cost credit

As well as payday lenders, there are several other high-cost credit firms that advertise on daytime TV.

Amigo Loans, with its jaunty smiley Mexicans, offers guarantor loans at 49.9%. Although cheaper than the payday alternative, these loans are still expensive and if they’re not paid back, the guarantor can be pursued for the money.

Elsewhere weekly payment store Brighthouse is a regular advertiser and previously sponsored Aussie soap Home & Away on Five. It charges an APR of 29.9% on a selection of electrical goods, gadgets and furniture.

But as well as a hefty APR the store also sells “service cover” at extortionate prices. The cash price of many items is also higher than elsewhere on the high street, meaning low income households can end up paying twice as much for items at Brighthouse compared to other retailers.

It’s happy to lend to the unemployed too so it could potentially lure people surviving on benefits onto expensive credit deals.

Accident companies

Claims management companies and no-win, no-fee solicitors are another band of big advertisers during the day. As well as making enough cash from spurious compensation claims to advertise on TV, these firms are generating enough revenue to persuade household names to front them too.

Ex-Eastenders and The Bill actor Billy Murray appears on adverts for Injury Lawyers4U while tennis commentator and TV presenter Andrew Castle earnestly tries to persuade viewers that First4Lawyers can help you pursue a compensation claim.

But the increasing compensation culture pushes up insurance costs for everyone. Last year I explained why when I wrote about car insurance, rip-offs, scams and lies. Essentially, insurance firms who pay out for personal injury costs will have to cover both sets of legal costs and will recoup their money by putting everyone’s premiums up.

PPI claims companies

Another advert frequently seen in the daytime is for PPI claims companies. Dressing up advertising as an “announcement”, these firms tell viewers they could have been mis-sold PPI  - and the best way to get their money back is to use a claims management company (CMC).

But what the adverts don’t tell you is that if you use a CMC to recover mis-sold PPI from a bank or credit card provider, the firm will take a cut of the money.

Worse still, CMCs have been accused of mis-leading consumers into thinking they are entitled to compensation and burdening both lenders and the Financial Ombudsman Service with time-consuming investigations.

Read How to claim your PPI compensation for a guide on how to do it yourself.

Debt management companies

Another type of firm that targets daytime TV viewers is debt management companies. These firms target indebted people and offer to help. As well as targeting people at home all day, some of these companies have been advertising during the ad breaks on I’m a Celebrity Get Me Out of Here.

But far from helping people with money worries, these firms can often make a bad situation worse.

They typically offer to set up either a debt management plan, where the firm negotiates a repayment schedule with creditors, or an Individual Voluntary Arrangement (IVA), where part of the debt is repaid and the rest written off.

But while these plans can be good solutions, they can come with big fees which means not all of the money paid by struggling consumers goes towards paying off debts.

Some organisations such as Step Change Debt Charity(previously the Consumer Credit Counselling Service) and National Debtline will set up debt solutions for free so these should be your first port of call if you can’t repay your debts. Read Where to get free debt advice for more.

More from lovemoney.com:

Where to get free debt advice

The most successful PPI complaints

Car insurance rip-offs, scams and lies
How to claim your PPI compensation

The best alternatives to payday loans

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Comments (15)

  • Mike10613
    Love rating 626
    Mike10613 said

    What can we expect with Atos Healthcare making millions under contract to get 'disabled and sick' people back to work. Jobcentre plus aren't exactly helpful when people need budgeting or crisis loans. Welfare rights team on local councils have been cut back in favour of more prestigious products by image concious local politicians and bureaucrats. It's all about making a profit these days. Those new road humps outside the school isn't about child safety, it's about making money. The paralympics wasn't about helping disabled people, it was about showing everyone what some disabled people could do, so they could use it as an excuse to cut benefits. Social enterprises are part of the Big Society and will mean even less social programs, they will be delivered by profit making companies instead. We'll have companies like Wonga running old folks homes soon.

    Report on 23 November 2012  |  Love thisLove  0 loves
  • PDB11
    Love rating 75
    PDB11 said

    Still don't have a telly. Over twenty years now, and I don't miss it at all. Reading articles like this doesn't motivate me to fork out for a telly and a licence one bit...

    Report on 23 November 2012  |  Love thisLove  4 loves
  • marram
    Love rating 49
    marram said

    @Mike10613 - I thought it was an old folks' home running Wonga.

    Seriously, though, I t seems as if the government of this country (maybe even the world) is hellbent on shifting the money from the pockets of the less well-off and putting into the pockets of the rich. Tine and time again you see inequality increasing. Look at China - that beacon of modern development - the rural poor there are even poorer than they ever were before, while the 'townies' are living it up buying luxury goods from the West as well as their own electronic marvels.

    How can paying ATOS to assess disability be more economically viable than using the people they already employ to do just that?

    Meanwhile they let these sharks do their worst, bleeding dry the vulnerable and desperate (vulnerable and desperate because of the actions of government in many cases).

    Report on 23 November 2012  |  Love thisLove  0 loves
  • lukaluv
    Love rating 1
    lukaluv said

    Love the dangerous ads title - but why is the worst culprit missing?

    There is an ominous absence. To us the missing nasties are the gambling and bingo ads. Stay away! They entice with a so called cash gift, which can only be spent on guess what? Their gambling site.

    Then they entice with celebrities pushing the poison.

    This insidious peddling holds out false hope of fast handfuls of cash.

    Picture a vulnerable one in need of funds giving their family money away to this hand of false hope.

    Report on 23 November 2012  |  Love thisLove  1 love
  • tuttogallo
    Love rating 99
    tuttogallo said

    PB11. I am moving soon and ditching the telly. I will still be able to see the odd BBC programme on iplayer. I think life will be better.

    Report on 23 November 2012  |  Love thisLove  2 loves
  • tuttogallo
    Love rating 99
    tuttogallo said

    When I retired, I was truly appaled by the cynical financial adverts on daytime TV which were clearly preying on the most disdavantaged members of our society.

    This whole area stinks of dishonesty and legalised scamming.

    Along with readers of this blog, I am fortunate to have some financial knowledge. In other circumstances, I could have easily been one of the victims. Frightening!!

    Report on 23 November 2012  |  Love thisLove  1 love
  • patriciaf
    Love rating 1
    patriciaf said

    Missing from this list are those "Save for your family after your death" type insurance schemes which appear prominantly on TV and which feature popular and (till now) well-respected and well-loved actors and TV personalities.

    In my opinion this is an unconscionable way of conning less well-off older people out of their hard earned cash by playing on their concern for their loved ones. These ads are not aimed at the more affluent who have been able to make provision for the future.

    The only way an "investor" can gain on this scheme is to die within a few years of taking it out. Beyond a certain point they end up paying in more than they will ever receive - doesn't anyone ever do their sums? - and if they stop paying the premiums for whatever reason (and it may be that they simply can't afford them any more) they will lose ALL the money they paid in over the years. It is nothing short of legalised robbery. These schemes should be banned by law with immediate effect.

    It only adds insult to injury when all these big names are willing to sell their face and their reputation for the sake of a pay-off. I wonder if they re-invest it in one of the schemes? I doubt it... Shame on them!!!!

    I do wish someone with a bit of clout would do something about it. Over to you…

    Report on 23 November 2012  |  Love thisLove  1 love
  • nosbort
    Love rating 160
    nosbort said

    What do you expect of a society that insists that a colour TV is a necessity and will provide one for benefit claimants. If those are the values of 'society' then the people in that society are led down a path which inevitably leads to this type of 'product' being sold as they are persuaded from an early age that it is their right to have what they want when they want it.

    Report on 23 November 2012  |  Love thisLove  1 love
  • common-t-'ater
    Love rating 0
    common-t-'ater said

    We don;t have to watch daytime TV to be bombarded with these ads. More and more of us wrinkles are using the internet and my spam folder is full of this rubbish. Mind you, at least the porn ones have stopped.

    Report on 23 November 2012  |  Love thisLove  0 loves
  • oldhenry
    Love rating 343
    oldhenry said

    The country is slipping back to the 'Victorian ' days of the entrpreneur only this time instead of making products to selll abroad it is about ripping off the suckers that live here.

    It has been obvious to the cynical types , such as me, for eons.

    Sadly, a sucker is born every minute and the governmnet are well pleased as most voters are suckers.

    the tories and labour have both stiched us up to end up like the USA where most eveil ideas originate

    Report on 25 November 2012  |  Love thisLove  0 loves
  • Steviebaby1959
    Love rating 34
    Steviebaby1959 said

    But, it's not just daytime TV commercials though is it, they're on the Radio, in all the newspapers and magazines, adverts all over my email site whilst attempting to log into my email account, never mind the actual advertising spam emails themselves, then there's the telephone calls and some idiot banging on my front door at all hours trying to sell me solar panels and conservatories, that I don't want and never will, and if that isn't bad enough, you go shopping and get challenged by some spotty oik who wants to know what your favourite hair spray and bathroom soap is, as they're having a promotional sale, then after leaving the store someone jumps in front of you on the high street with a clipboard wanting to know if you'll give some money to a children's charity, or, a pet rescue centre, and when we get home our boxes of Cornflakes we've all just purchased are bugged by Supermarket chains to listen in to our conversations, purely for marketing purposes of course, and Big Brother Goverments listen to our mobile phone calls and read our social networking sites and keep surveillance on everything we do, say, think and consume.

    I'm considering going to a far away Planet to live in peace and quiet, does anyone have a spare spaceship I could borrow please?

    Report on 25 November 2012  |  Love thisLove  0 loves
  • Meduza78
    Love rating 18
    Meduza78 said

    welcome and join the telly-less club. i do not have a telly, it has been nearly 10 years now. i do not miss it at all. actually, when i go back to my parents house, i find it strange that the funny flashing and shouting box is on for many hours a day, often since late morning till early morning. i cannot stand it - mainly because of the adverts that go on and on and on the whole day. internet is my biggest time consumer, but it is much better than passively sitting and watching nonsense like reality shows or other stupid waste of time.

    Report on 29 November 2012  |  Love thisLove  0 loves
  • Meduza78
    Love rating 18
    Meduza78 said

    when i read that the adverts are everywhere... bizarre. one tries to escape them in the main media and the adverts sneak into the every corner of one`s life space and follow him/her, even to the toilet (if he/she takes the smartphone there, yuk). anyway, even if one tries to switch off from media, they will find him - in the public transport as can be seen in japan. they have flat screens playing the adverts in their trains as i have seen recently on some video. the posters are not enough, the travelling TV (pardon, no TV there, just adverts) flashing right in front of their faces. i dont know if they play the sound as well... if they do, i will go mad if they will bring it here.

    i guess that in the near future - there will be no window in such carriages, all of them will be replaced by fractioned screens, so the advertisers make sure that no one had the chance to miss their sh*t.

    Report on 29 November 2012  |  Love thisLove  0 loves
  • Salfordguy
    Love rating 22
    Salfordguy said

    Welcome to the "get it now worry about it never" or "I'm not to blame its societys fault, I wonder if I can claim compo" culture of the 21st Century which got us into the financial crisis. I didn't know students and the unemployed had "pay days"?!!? If you don't have the money don't buy it with a pay day loan, you're in a downward spiral. If you are too stupid not to understand what APR means its your own fault. When I see people moaning pleading poverty they are always sat on an expensive leather sofa have Sky HD, latest mod cons, having a fag!!

    Report on 30 November 2012  |  Love thisLove  0 loves
  • andrewjameshowar
    Love rating 26
    andrewjameshowar said

    Strikes me the ads are aimed at the audience. Who is watching daytime TV? The programmes are mind-numbing rubbish. Listen to radio 4 instead. No adverts there. Or, if you can, get off the couch and out of the house!

    Report on 30 November 2012  |  Love thisLove  0 loves

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