PTAC recently set up a website, parads.lv, for campaign 'Call things by their right name'. It subverts payday lending websites by substituting the word 'loan' with 'debt' and otherwise driving the point home against careless spending.
"It's worrying that people use payday loans, which have to be repaid in a single installment, for covering debt, paying their dues, buying products that are not basic necessities. It testifies that the person's financial literacy is low and they don't know how to choose the right credit for them," said PTAC head Baiba Vītoliņa.
A University of Latvia survey, encompassing 1,000 respondents of whom 300 have used payday loans within the last three years, shows that 40% had used these loans to pay their debts or dues, while 21% had bought electronics or phones; and 12% had used them for travel.
Meanwhile the payday lenders are not amused. An association headed by Gvido Endlers, also the head of the council at the 4finance payday lending giant, says that the association's own research has produced very different results.
"We are acting responsibly. We only give loans to 30 out of 100 people during the review process. It means we don't grant 70% of loan requests and these 70% are the ones who should be taught to be responsible," he said.
While the association says only 5% people have problems paying back their loans, the University of Latvia research says more than 38% have difficulty planning their budget for paying back their debts.
"We think [the campaign] is discriminatory against niches as we don't see any difference at all whether it concerns non-bank loans or loans issued by banks," said Enders.
Meanwhile the loan portfolio of non-bank lenders is growing. Banks had issued more than €300m in consumer loans, as opposed to €280m by the non-banking sector, of which most were by payday lenders.
Economics Ministry has started work on new regulations for the industry with tighter restrictions planned for verifying whether a person can repay the debt they're about to take. Advertising restrictions are also being considered, a ministry representative told LTV.
Currently loans of more than €427 require that people prove their income while PTAC wants to lower this to €200.
Payday lenders enjoy a strong lobby in Latvia. In 2015, sports stars spoke up against proposed regulation after a payday lender said they might cut sponsorship in response to tighter regulation.