Instant Cash Loans Ltd (trading as The Money Shop) has been informed one of its adverts cannot be shown again in its current form.
A TV ad for a payday loans company featured a voice-over which stated, “Even with the best training, keeping an eye on our money can be a bit of a tease, and if you’re looking at your finances, The Money Shop can point you in the right direction.” On-screen text then switched from “All loans are subject to credit and affordability checks so not all customers may be eligible for a £1000 limit. Maximum £500 for new online customers. Customers must be 18+. T&Cs apply” to “2961.4% APR (variable) representative” and the voice-over continued, “Loans up to £1,000 available online or from your local store, and applying for one is a walk in the park. So if you’re experiencing one of life’s little ups and downs, apply online through [website address].” A yellow circle with the text “£5 Cashback for every £100 borrowed” then appeared on screen, accompanied by the voice-over statement, “And when you pay back in full on your original due date, we’ll give you £5 cashback for every £100 you borrow.”
Two complainants challenged whether the ad was irresponsible, because it presented a payday loan as a way of addressing financial concerns, and the Advertising Standards Authority (ASA) challenged whether the representative APR (RAPR) was sufficiently prominent.
The ASA considered that the voice-over statement, “Even with the best training, keeping an eye on our money can be a bit of a tease, and if you’re looking at your finances, The Money Shop can point you in the right direction” positioned the advertised service as of benefit to those having difficulty in managing their finances and implied that it was a suitable medium of addressing ongoing financial concerns. It noted the existence of the graphic of the moving on-screen cursor at the point that the voice-over referred to “the right direction”, but did not consider that that changed the impression given by the claim that the Money Shop could be a solution to financial worries, whether in-store or online.
The ASA understood that short-term, high-interest loans of the type promoted in the ad were primarily of benefit to those in need of money to cover occasional unexpected shortfalls between paydays, and were not intended as a solution to wider financial problems. Although it was satisfied that the reference later on in the ad to the loans as being suitable for those “experiencing one of life’s little ups and downs” accurately reflected the main purpose of the credit product on offer, the ad watchdog considered that that was not sufficient to counteract the impression given elsewhere in the ad that payday loans of the type promoted were a suitable method of addressing wider financial difficulties. It therefore concluded that the ad was irresponsible, breaching BCAP Code rule 1.2 (Responsible advertising).
On the second point, the ASA noted that, under Regulation 6(1)(b), credit ads must specify an RAPR if they included any incentive to apply for credit or to enter into an agreement under which credit was provided, and that that RAPR should be given greater prominence than the incentive (Regulation 6(2)). It acknowledged the Money Shop’s and the agency’s argument that the offer of £5 cashback for every £100 borrowed, payable when the loan was repaid in full on or before its due date, was not an incentive but rather a reward for good borrower behaviour. However, the ASA considered that it was likely to encourage viewers to consider taking out a loan with that company and was therefore an incentive to apply for credit. It noted that the legal assurance from the Money Shop, upon which Clearcast had relied in approving the ad for broadcast, had treated the cashback offer in that manner.
It further noted that ads stating a rate of interest or an amount relating to the cost of the credit were also required, under Regulation 4(1), to include standard information by means of a representative example. Ads were exempt from this provision only when Regulation 6(1) applied and the only rate of interest or amount relating to the cost of credit was the RAPR itself. The ASA therefore understood that were the cashback offer not to be an incentive to apply for credit requiring (under Regulation 6(1)) the inclusion of the RAPR, and if the ad did not include any other triggers for the RAPR, the ad would have needed to include a representative example.
While the RAPR was written in a larger font size than the cashback offer and was displayed for slightly longer, it was not shown at the point that the cashback offer was introduced, or at any point thereafter, and that the cashback offer was presented in the main part of the screen within a bright yellow circle whilst the RAPR was not. The ASA considered that that had the effect of making the incentive to apply for credit stand out more to viewers than the information it triggered. The ASA therefore concluded that the RAPR was not given greater prominence in the overall presentation of the ad than the cashback offer which triggered the requirement for its inclusion, and that the ad breached the Code.
The ASA ruled that the ad must not appear again in its current form. It told Instant Cash Loans Ltd to ensure that ads did not present payday loans as a way of addressing ongoing financial concerns and that ads which included an incentive to apply for credit also included an RAPR with sufficient prominence.
