Loans 2 Go has been told by the Advertising Standards Authority (ASA) not to repeat its tv secured loan adverts.
The Rochdale firm had two TV ads for a secured loan against a consumer’s vehicle.
In the first, a man stood on his driveway where his car was parked with a “FOR SALE” sign in the windscreen. A voice-over said, “Out of cash? Selling your car to make ends meet?” A man dressed in Austrian costume, with lederhosen and a feathered cap appeared playing an accordion and singing “For cash today, use loans2go, for cash today, use loans2go, for cash today, use loans2go, you still get to keep your car. You still get to keep your car, you still get to keep your car. For cash today, use loans2go, you still get to keep your car” to the tune of ‘For he’s a jolly good fellow’. The voice-over then said, “Take out a logbook loan on the car you own” and the man reappeared singing “You still get to keep your car”.
During the ad, the man and three women, who were also dressed in Austrian costume, were dancing around the car and clashing cymbals. Towards the end of the ad, the man in Austrian costume handed the car owner a wad of £20 notes and the car owner was seen smiling. The ad included on-screen text that stated “Loans secured on your vehicle. Subject to value of vehicle, proof of income, status and availability. Age 18+. logbook, MOT, insurance details, Proof of I.D. and address required. Representative APR 356.3%.” The end frame of the ad featured larger on-screen text stating “Loans2Go. Same Day Log Book Loans.”
In the second ad, an ice cream man was standing in his van and a voice-over said, “Out of cash? Your business needs a helping hand?” A man dressed in Austrian costume appeared and sang the same song as in the first ad. The same three women appeared and were dancing around the ice cream van and eating ice cream. The same on-screen text as in the first ad appeared during the ad. Halfway through the ad, the man dressed in Austrian costume handed the ice cream man a wad of cash. The ice cream driver was then seen smiling and dancing along to the song. The ad featured the same on-screen text as the first advert at the end of the ad.
The complainant challenged whether the APR was sufficiently prominent and legible in the first ad, while the ASA challenged whether both ads were socially irresponsible by trivialising the nature of taking out a secured loan on your vehicle.
Loans 2 Go said the ads were not intended to provide viewers with a comprehensive reference point for entering into a contractual relationship with them. Rather, they were light-hearted, humorous ads designed to help consumers familiarise themselves with the brand of Loans 2 Go. The ads identified and reflected real-life situations that Loans 2 Go said their customers faced, and the ads were pitched in that context. They explained that applicants were required to undergo a full affordability check, amongst other things, before entering into a contractual relationship with them. They did not believe the ads trivialized the nature of taking out a loan.
Clearcast believed that using a car as collateral would be potentially far less debilitating to the consumer in the event they defaulted on the loan, than if they had taken out a loan against their home or wages, for example. Notwithstanding that, they pointed out on-screen text appeared during the ads that made clear that the loan would be secured against the applicant’s vehicle. They were therefore satisfied that the ads were not socially irresponsible.
The ASA considered whether the text “Same Day Log Book Loans”, which appeared in the end frame of the ad, constituted an inducement to take out a loan with Loans 2 Go over other providers who might take longer to transfer funds, once an applicant had been approved. The regulator understood that not all logbook loan companies (lenders who offered secured loans against the applicant’s vehicle) paid monies within 24 hours and that borrowing through other means, for example an unsecured bank loan, may also take longer to credit the borrowed funds. It therefore considered the claim “Same day loans” amounted to a comparative indicator for the purposes of regulation 6(1), which consequently acted as a trigger to include a representative APR.
Because the ASA considered that claim acted as a trigger, the ad was required to give the representative APR greater prominence than the trigger. The text “representative APR” appeared in smaller font than the claim “Same Day Log Book Loans”, which we considered did not give it the greater prominence required by regulation 6(2). It therefore concluded the ad breached BCAP Code rule 14.11 (Lending and credit).
The first advert stated the man needed financial help to make ends meet while the second explained the ice cream van business was experiencing cash flow problems. These were claims that the ASA considered suggested that the loan was a necessity. In addition, the ASA noted both ads featured on-screen text that stated loans were subject to proof of income and we understood that potential applicants underwent an affordability check as part of the application process, which was undertaken in a Loans 2 Go branch. The ASA considered the reasons for taking out credit were unlikely to be seen by viewers as frivolous.
However, it noted the jingle used in both ads was catchy and upbeat, that it was likely to be recognised by many viewers as the tune of ‘For he’s a jolly good fellow’, and that during both ads, men and women were seen dressed up in lederhosen dancing, singing and smiling while both drivers were handed a wad of bank notes. The ASA considered that the overall atmosphere of both ads was jolly, light-hearted and humorous, in contrast to the serious nature of the business of taking out a loan.
The ad watchdog noted that the ads explained the men needed a loan to help with a financial shortfall, portrayed taking out credit as a one-off and stated explicitly that loans were subject to proof of income, but due to the celebratory atmosphere of the ads and the lack of emphasis on the potential consequences of taking out a loan, the ASA felt the ads trivialised and presented a casual attitude to taking out a loan. For those reasons, it concluded they breached BCAP Code rule 1.2 (Social responsibility).
Loans 2 Go were told the ads must not be broadcast again in their current form. The ASA told the secured loan firm to ensure their advertising complied with the relevant consumer credit legislation and was prepared with a sense of responsibility to consumers and society.