MediaWorks pulls ads for payday lender Pretty Penny Loans from Mai FM

Monday, 5 September 2016

Payday lenders charge high interest rates for what are meant to be short-term loans.

MediaWorks has pulled advertisements from its radio stations for a payday lender, after a backlash from listeners.

James Andrew Harris posted to Mai FM's Facebook page on Monday, saying he was a fan of the station but was sick of it 'promoting' companies such as Pretty Penny Loans, which he said he thought were 'predators preying on those in a vulnerable situation'.

He was joined by another almost 200 commenters.

Pretty Penny charges 1 per cent interest per day – or 365 per cent per year. It also charges administration and set-up fees.

* Commerce Commission announces plan to put payday lenders under scrutiny

* Google boycotting payday loan ads**

Although the rate is high compared to credit cards at about 20 per cent or mainstream personal loans, it is not illegal.

Payday lenders can charge up to more than 500 per cent per year, because they claim they are targeting people who will pay the money back within a couple of weeks.

There are no restrictions in New Zealand on the interest rates that can be charged but recent changes to credit and consumer finance laws mean the annual interest rate now has to be disclosed if any interest rates are being advertised.

Pretty Penny offers loans of up to $500 processed within a day and says: 'Whether working or on WINZ Benifit [sic] all applications will be considered. We believe in treating each person with the trust and respect they deserve. Keep your personal information personal.'

It also says it has a high approval rate and understands people face financial challenges.

Lenders are no longer allowed to say they do not offer credit checks.

Calls to Pretty Penny have gone unanswered.

A spokesman for MediaWorks said the advertisement had played on other stations as well but has been pulled.

'We have received a number of messages from listeners voicing their concerns. We have taken the adverts off-air and are reviewing the situation.'

Harris also criticised Instant Finance, which charges up to 30 per cent.

* What's the highest interest rate you've paid? Contact newstips@stuff.co.nz