Kerry Katona's advert for payday loans company Cash Lady was "irresponsible" and could influenced vulnerable viewers that high interest loans could help them live a champagne-fuelled celebrity lifestyle, the advertising watchdog has ruled.
Katona, who has had a series of financial difficulties, came under heavy fire for appearing in the advert for Cash Lady, owned by PDB UK. In a blog for the Huffington Post UK, Katona admitted it was ironic for her to be seen to be doling out money-saving tips.
"I think a lot to do with all this kerfuffle is that controversy seems to follow me around wherever I go, and I'm sure the irony of me giving out financial advice isn't lost on anyone who knows even a little bit about me and my life. I was made bankrupt, had my house repossessed and made some terrible decisions with money," she wrote.
Kerry Katona's advert for Cash Lady has been banned by the ASA
"But I can hold my head up high, I'm paying off my debts and the one thing I know now more than anything is how to make ends meet for me and my family. And every now and again for people like me when emergencies come up that might mean getting a short-term payday loan."
In the ad, a smiling Katona addresses the viewer, saying: "We've all had money troubles at some point, I know I have.
"You could see your bank and fill in loads of forms, but is there an easier way to get a loan... So if you need extra cash go to www.cashlady.co.uk. Fast cash for fast lives."
The ad drew 29 complaints that it was irresponsible because it focused on Katona's financial problems and encouraged people in similar situations to borrow money.
The Advertising Standards Authority (ASA) also challenged whether the ad was misleading and irresponsible because it promoted itself as an alternative to banks while offering an APR in excess of 2,000%.
Cash Lady said Katona was selected as its "face" because their customers would be able to relate to her.
However the ASA said references to Katona's financial problems within the ad "had the potential to encourage vulnerable viewers with financial problems and/or restricted credit from seeking to resolve them through the payday loan service" and concluded that the ad was therefore irresponsible.
It said some viewers with restricted credit may have found the product in the ad particularly attractive because of their identification with Katona and the references to her own past financial problems.
The ASA also found that the APR was not more prominent than the other information which triggered its requirement in the ad, therefore breaching the code.
It ruled: "The ad should not appear in its current form. We told Cash Lady to take care with the overall presentation of information of its loans."
Labour MP Stella Creasy, who has long campaigned for tighter restrictions for pay day loan companies said: "I'm pleased to see the ASA calling out an example of the poor practices and problems payday lending companies are inflicting on Britain that we've been trying to warn the Government about for several years now.
"As complaints rise by 100% or more year on year, the evidence is piling up as to just how toxic these loans can be - the question is how much worse does it have to get before the Government finally stops listening to the loan sharks and starts listening to the needs of the British public and does something to tackle the problems they cause.
"Until they do I hope others will join me in standing up to these firms and refusing to promote them and I repeat my offer to meet Kerry and explain the problems this industry is causing people in communities like mine."