ASA Adjudication on Log Book Loans Ltd

Ad

A radio ad, for Log Book Loans, stated "Need quick and easy cash, hassle free? Then Log Book Loans are here to help. We offer personal loans from £500 up to £50,000 secured against your car’s log book so you can carry on driving. Our loans are based solely upon your vehicle, so if you want money for any purpose, unlock the cash in your car. Just phone 08700 XX XX XX, log on to xxx.co.uk or text the words ‘loans’ and your details to XXXXX. Unlock the money in your car today and keep on driving."

Issue

The listener believed the ad was misleading, because it did not state:

1. that the car could be repossessed if repayments were not made and

2. the typical APR.

BCAP Radio Code

Response

1. The Radio Advertising Clearance Centre (RACC) said the ad stated clearly that a secured loan was on offer and they believed consumers generally understood the difference between secured and unsecured lending and would realise that some kind of collateral would be required.

2. The RACC said they considered that the Consumer Credit Regulations (CCR) requirement that the APR had to be stated in a credit ad had not applied to the content of this ad. They said they did not always advise advertisers offering credit to quote a typical APR. However, they said if the CCRs required an APR to be stated in an ad that offered credit they would be happy to advise financial advertisers of that requirement in future.

Assessment

1. Not upheld

The ASA noted the ad stated that the loan would be secured against the value of the car. We understood from the Office of Fair Trading (OFT) that the CCRs required warning statements about repossession to be included only in ads for mortgages. Because the advertised loans were secured against the value of a car, we considered it was not necessary to include a warning statement that the car would be repossessed if repayments were not made. We concluded that the ad was unlikely to mislead.

On this point, we investigated the ad under CAP (Broadcast) Radio Advertising Standards Code section two rule 3 (Misleading Advertising) and section 3 rule 1.2 (Financial Products and Services - Misleadingness) and rule 1.8 (Lending and credit advertisements) but did not find it in breach.

2. Upheld

We contacted the OFT who said they took the view that the phrase "need quick and easy cash" constituted an incentive for the purpose of regulation 8(1)(d) of the CCRs. They said that regulation required any credit ad, which included an incentive to apply for credit or to enter into an agreement under which credit was provided, to also specify the typical APR. We concluded that, because the ad did not include the typical APR, it was misleading.

On this point, the ad breached CAP (Broadcast) Radio Advertising Standards Code section two rule 3 (Misleading Advertising) and section 3 rule 1.2 (Financial Products and Services - Misleadingness) and rule 1.8 (Lending and credit advertisements).

Action

The ad must not be broadcast in its current form.

Adjudication of the ASA Council (Broadcast)