Nimble In Hot Water Over Pay Day Loan Schemes
Tuesday 13 January 2015 @ 9.46 a.m. | Trade & Commerce
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.
Background
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.
Comment by Nimble
Nimble has since agreed to pull the ad at the end of January 2015, but a similar ad relating to phone bills is also under scrutiny.
Consumer Action Law Centre Chief Executive Gerard Brody said:
"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."
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.
A statement from Nimble CEO Sami Malia said the ads were not intended to be taken literally and is in line with all relevant Codes and Regulation:
“Most people find themselves short of money at one time or another, and our ads are designed to engage people around that generic situation. They aren’t intended to be taken literally, which is why we’ve had Germans in a car engine, men in dog suits and a man in a rabbit costume. Our advertising is in line with all relevant codes and regulation.
Following feedback that some people could take one of our ads literally, and despite the fact we advise applicants to speak to their utility provider on our application form, we have decided to cancel the ad around the gas bill.”
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."
Warnings for Users of Payday Loan Schemes
Robert Whitton was lured by a similar payday loan scheme after a series of unfortunate personal events.
Mr Whitton said:
"It was very easy to get it, and very awkward to pay back - the offering was there - you take it because you're desperate … It was hard enough for me, and through my experience over the past year, you'd never see me near it."
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. ASIC said it is increasing its focus on payday loan schemes, including Nimble.
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Sources:
Nimble pulls ad over concerns it exploited people in financial hardship - mumbrella.com.au
Payday lender Nimble Money under fire for ads offering help to people struggling to
pay utility bills – abc.net.au
