Cash on Go Ltd, which trades as Peachy.co.uk, has fallen foul of the Advertising Standards Authority (ASA).
A TV ad for the short-term loan company featured a voice-over which stated, “Payday loan companies expect you to repay your loan in one big payment. However, Peachy.co.uk offers multiple repayments, that’s right, multiple repayments.” Images of different payment amounts appeared before on-screen text stated “MULTIPLE REPAYMENTS. Over 18s, subject to status. representative APR 1058%. Terms and conditions apply”.
One complainant challenged whether the claim “payday loan companies expect you to repay your loan in one big payment” was misleading because they understood most companies allowed payments in instalments and the ASA challenged whether the APR was sufficiently prominent.
Cash on Go said they had provided Clearcast with a list of the top 22 lenders which included those who offered instalment loans and which also included those who did not (at that time) offer instalment loans.
They said they were confident that the ad met the requirements of the Consumer Credit (Advertisements) Regulations 2010 when it was submitted to Clearcast and that there was no intention to mislead consumers.
Clearcast said at the time of clearance, they felt that the APR information was prominent enough, but said that, in the light of recent ASA decisions, they would be happy to amend it.
The ASA noted ‘payday loans’ were known for often requiring the total repayment of the loan on the borrowed amount by the next payday (hence the name) and understood many payday loan companies used this repayment practice. However, it considered it was understood that the term “payday loan” encompassed a variety of short-term loan types, including those with multiple repayments.
The ad regulator notes that, of the 22 examples provided, the majority required a single repayment and that the others, like the one offered by Cash on Go, offered multiple repayments. Although it understood that flexible repayment options were likely to be in the minority, it considered that the claim “payday loan companies expect you to repay your loan in one big payment” implied that all payday loan companies (or those offering short-term loans) required the entire sum to be re-paid in a single repayment, when this was not the case. It therefore concluded that the ad was misleading.
On this point the ad breached BCAP Code rules 3.1, 3.2 (Misleading advertising) and 3.9 (Substantiation).
The Consumer Credit (Advertisements) Regulations 2010 states that, where a credit advertisement included trigger information (such as an incentive to apply for credit), the ad was required to also contain a representative example of the APR (RAPR), and that the RAPR information needed to be more prominently presented in the ad than the multiple repayment incentive.
The RAPR information appeared once, within the on-screen text “MULTIPLE REPAYMENTS. Over 18s, subject to status. representative APR 1058%. Terms and conditions apply”. Considering the ad in its entirety, the ASA considered that the RAPR was not more prominent than the trigger information and therefore concluded that the ad breached the Code.
On this point the ad breached BCAP Code rules 14.11 (Financial products, services and investments).
The ASA ruled that the ad should not appear again in its current form. It told Cash on Go to ensure that future ads did not imply they were the only short-term loan company offering multiple repayments and reminded them that the RAPR needed to be more prominent that the trigger information.
This is the second ASA adjudication against Cash on Go this year. In March the firm was found to have mislead listeners in its phrasing of its representative APR within a radio advert.