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:
The most successful PPI complaints
Car insurance rip-offs, scams and lies
How to claim your PPI compensation