Should Payday Lenders be Able to Compete Equally?

Posted on July 23rd, 2014 by Toni Burns

Upon opening my post this morning, I have received a standard circulated letter from Barclaycard offering me 0% on any outstanding balances that I transfer over from any of my other credit cards. However, I am told in the small print that a fee will be applied to each and every balance that I transfer over.

Reading into the terms and conditions closer, I am informed that as soon as the promotional period ends, the interest will go to 18.9%. 

Plus of course, if I miss any month’s minimum payment deadline, the rate will immediately increase to the full 18.9%

I then find another letter addressed to me and this one has been sent by Lloyds Bank offering me “a breather from my credit card interest”. 

This letter has a very similar presentation to that of my previous one from Barclaycard, as it is  also offering me a term of free interest rates for balance transfers. 

Likewise, I notice that a transfer fee will also apply  when I read further down my personal invitation and like Barclaycard, once the promotional period expires, I will then pay their normal interest rate.


Last month was my birthday and I received lots of emails and post from various companies sending me my annual birthday greetings, many of which included special celebratory offers.

I let myself be seduced by a restaurant’s invitation offering me a complementary bottle of wine with two meals, so decided to treat myself to dinner at their establishment with a close friend.  

The evening finished up costing me a lot more than I originally bargained for, but still had a really good time and pleased I went.

Let me make it clear that I have no objections to receiving birthday wishes from companies wishing to offer me various discounts, codes or enticements along with the greetings.

Nevertheless, I am not naive enough to really believe that these letters and emails are being sent to me because they really care whether it’s my birthday, anniversary, or anything else. whois . I am aware only too well that this is all part of the business world that we live in, and ever firm is competing with one another to try and make a profit.

This is why I am looking at today’s news story about a payday loan company that is being crtiticised for doing that very same thing. 

CashEuroNetUK, who trade as Pounds to Pocket have been sending out emails to their clientele on their birthdays. The message sends this greeting: “Happy birthday from Pounds to Pocket – we’d like to wish you the best on your special day! Now you can apply for the money you need to enjoy your birthday worry-free.”

Surprise, surprise, this has caused major uproar with many and the bad publicity continues to reverberate within the media. 

This short term lender has simply marketed their product in a generic fashion, but they are penalised for doing so, whereas most other companies will not even get a slap on the wrist. Is this type of email not just common practice for many businesses?

Now please don’t get me wrong. Payday loans up until recently have gotten away with more than their fair share. However now that the new watchdog has intervened and given the lenders much tighter regulations to adhere to, companies are having to do just that.

If the Financial Conduct Authority are making the payday lenders abide by these stricter rules, then why should it be a problem for Pounds to Pocket to send out their marketing strategy in this particular form?

Citizens Advice explain that the term “worry-free” should not have been used. The charity’s chief executive Gillian Guy believes that “it is irresponsible for any lender to promote a casual attitude to borrowing by suggesting using loans are worry-free and can be used to fund celebrations.”


Gillian Guy

CashEuroNetUK say they go to “great lengths” to do the right thing and it was the firm’s intention to give their customers a personal touch and convey to them just how much they value their custom. 

The Advertising Standards Authority have stated: “We concluded that the email was irresponsible because it encouraged taking a short-term loan for frivolous spending and promoted the process of borrowing as trivial and without responsibility.”

The lender has now withdrawn the email just as they have been instructed to do.

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About the author

Toni Burns Toni Burns is a Digital Marketing Specialist at Cash Sorted and writes the majority of our informative blog posts. She keeps on top of the finance industry and reports back on any changes that could affect our users. Toni loves skiing, eating out & listening to music.

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