Payday lender Nimble Money under fire for ads offering help to people struggling to pay utility bills

Updated

A new wave of advertising from a payday loan scheme has come under fire from the consumer and social services sector.

Nimble Money is pulling one of its ads, after criticism it exploits people in financial hardship.

The ad depicts a man showering when his hot water is cut off and then being encouraged by a Nimble rabbit mascot to use a payday loan to cover the bill.

The Consumer Action Law centre said the ad is irresponsible because it suggests consumers use a payday loan, when all utility companies offer financial hardship repayment schemes.

Nimble has since agreed to pull the ad at the end of the month, but a similar ad relating to phone bills is also under scrutiny.

"There are similar obligations for telco providers with hardship policies... and no-one should need to get a payday loan to pay a telco bill," Consumer Action Law Centre chief executive Gerard Brody said.

Like other payday loans, Nimble provides up to $1,200 via an online application and borrowers are debited the repayment on their next pay day.

In a statement to the ABC, Nimble said its ads are not designed to be taken literally.

It also said it caps the interest and charges at 100 per cent of the original loan, and does not lend money to people on Centrelink benefits.

Adam Mooney, chief executive of interest-free lender Good Shepherd Microfinance, said the company's fees are still too high.

"Somebody who takes out a $1,000 loan over six weeks, they have to pay $240 in finance costs - that's just completely extortionate and inappropriate," he said.

Former payday loan company user swears off lending schemes

Pensioner Robert Whitton was lured by a similar payday loan scheme after a marriage breakdown, and later became homeless.

"It was very easy to get it, and very awkward to pay back - the offering was there - you take it because you're desperate," he said.

With some help from Good Shepherd Microfinance, Mr Whitton has got his finances back on track but he is warning others against payday loan schemes.

"It was hard enough for me, and through my experience over the past year, you'd never see me near it," he said.

ASIC said it is increasing its focus on payday loan schemes, including Nimble.

Topics: business-economics-and-finance, consumer-protection, industry, banking, australia

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