Only mums use payday loans – Is Kerry Katona being irresponsible endorsing the use of these high interest forms of finance?

KERRY – TAKING THE OPPORTUNITY OR BEING OPPORTUNISTIC WITH ADVERTISING PAYDAY LOANS?

Kerry Katona photocall

“It’s like going to a hotel for a weekend break and asking the receptionist what it would cost to have the room for 12 months.” (Kerry Katona, article – Huffington Post)

I was listening to an interesting package on the radio about Celebs like Kerry Katona endorsing Payday loans.

I am in two minds about this. One the one hand, in this economy, some may argue that it would be churlish for us to deny Ms. Katona an opportunity to earn some ‘dollars’ and pay down some of her own debt. Kerry’s debt-problems have been well documented in the mainstream media, as she went bankrupt in order to write off some of her debt back in 2008. Unlike the majority of people, she has managed to keep up a fairly luxurious lifestyle since then. It is much like big corporations, who go bust to avoid paying a tax or whatever and then come back re-formed and reborn. Hallelujah!

On the other hand …. Kerry Katona is a public figure. That entails a certain level of responsibility, and she is looked up to by many mums and families as an archetypal single mother who won out despite a challenging life and problems.  So, really, should she be endorsing one of the most vexatious and problematic types of loans?

According to a study by Stepchange Debt Counselling formerly CCCS (see link to Guardian article) the amount of people using these types of loans has risen, from 7,841 in 2010 to 17,414 in 2011 and 25,476 in the first three quarters of 2012. The purpose of these loans is to cover short-term difficulties, but there is evidence that many people are using them for day-day expenses, simply rolling them over, and hence trapping themselves in a cycle of debt. There is also an argument that they aren’t open with you from the start, often quoting an annual APR (annual percentage rate). How can you judge the competitiveness of a monthly short-term loan when it gives you an annual rate? I must admit the image of nitting grannies for one well-known firm (I refuse to name them because I don’t want to give Payday companies the time of day, let alone free advertising) inspires warm images of a friend giving you a hand. However, the reality is that often consumers are trapped in a cycle of ever-increasing debt.

So, back to the original question – is Kerry Katona irresponsible in her actions? I guess the answer is if you were offered a big wad of cash to promote a product that could potentially harm many people would you? I think you would have to search your conscience. And I think that is where the answer lies – with Kerry’s conscience.

Here is Kerry’s response to the criticism (courtesy of the Huffington Post, http://www.huffingtonpost.co.uk/kerry-katona/kerry-katona-pay-day-loans_b_2457204.html)

NEWS@HOFF: OPINION?

But what do you think? Comment on this post – don’t be shy!

SOURCES: Guardian, This is Money, Green Nobles.

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2 thoughts on “Only mums use payday loans – Is Kerry Katona being irresponsible endorsing the use of these high interest forms of finance?

  1. I could never use one of these companies, the APR rates are unreal! I absolutely agree with you, love her or loathe her, it is a pretty irresponsible thing to do endorsing a product like this that does so much damage. A guy killed himself in May last year as he couldn’t keep up with the repayments on his Wonga loan. I would never recommend one of these, not even in the most extreme circumstances as they would just make things worse.

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