ASA Adjudication on CashEuroNet UK LLC

Ad

A TV ad for short-term loans showed a woman at home doing her accounts. The voice-over stated “You know it doesn't matter how careful you are with money, sometimes your pay just won't stretch far enough. That's where QuickQuid the online pay day lender could help. With their short-term loans you could borrow what you need now and pay it back on your next pay day. Just visit QuickQuid.co.uk/TV or call our helpline for more details". On-screen text appeared stating "Need money quickly? Call 0808 XXX XXXX". The voice-over continued "... and, if approved before 2.30pm, you could have the money in your account the same day, or the next working day if approved after 2.30 pm. Remember, with QuickQuid you could have a five-minute application form, quick approval and same day funding". The woman continued "Too many bills this month? Do what I did, visit QuickQuid.co.uk/TV and get the money you need today. It's so quick and simple. There's nothing to fax and no extra paperwork to send." The voice-over continued "Contact us now on QuickQuid.co.uk/TV or call our helpline. Make any day pay day with QuickQuid. QuickQuid are committed to responsible lending. Short-term advantage should not be used as a long-term financial solution."

Issue

Twelve viewers, including an MP, objected that the ad was misleading and could exploit the vulnerable because when they visited the QuickQuid website they discovered the rate of interest on a loan was over 2000% APR.

BCAP TV Code

Response

CashEuroNet UK LLC t/a QuickQuid (QuickQuid) said they were a provider of short-term loans whose clients borrowed money for limited periods of time determined by reference to the date on which those clients were paid their salary by their employer. They said the maximum loan was £750 which was reduced to a maximum loan of £300 for new customers. They said loans were repayable on the borrower's next payday between 22 and 70 days from the draw down of the loan, depending on the frequency with which the borrower was paid. They said the repayment cycle was longest for those paid monthly and shortest for those paid weekly and loans could be extended by a maximum of five days. They said the average period of a loan was 42 days. They said that, because the loans were short term, borrowers would expect funds to be credited to them quickly.

QuickQuid said customers applied for loans online through their website, which included full details of loan terms including the finance charge and APR. They said the ad referred viewers to their website and their free telephone helpline for more details and a viewer interested in a loan with them was therefore provided with necessary details to obtain further information, including the APR. They acknowledged that certain loan arrangements could attract an APR of approximately 2000% due to the short-term nature of the loans provided. However, they said the ad's intention was not to mislead, but to provide a general description of their services. They said they were a responsible lender and ensured appropriate checks were made on all applicants as to their credit status. They said loans were not automatic, but were subject to approval by QuickQuid and to terms and conditions.

QuickQuid believed their ad had been prepared in compliance with the requirements of the Consumer Credit (Advertisements) Regulations 2004 and said both these Regulations and the Office of Fair Trading (OFT) Guidance on them noted that there was only a requirement to include an APR in an ad in the presence of certain "triggers", such as the inclusion of an incentive. QuickQuid believed the "same day funding" claim in their ad was not an incentive because that feature of their loans was, in principle, available to all their customers and was not a special offer to particular applicants at particular times. They said same-day funding was a typical feature of payday and other short-term lending products and would not confer a particular advantage to QuickQuid's product over other products and they believed, for that reason, it did not constitute an incentive. They said their ad made it clear same-day funding was a possibility but was not automatic as it stated "you could have the money in your account the same day" not "you will have the money in your account the same day".

QuickQuid emphasised that, whilst the ad did not refer to an APR, a borrower had to visit their website to obtain a loan, something the ad made clear by having the woman featured look on her laptop. They said full details of their charges and fees were provided on their website and they believed the ad did not therefore mislead.

Clearcast said they had considered the ad carefully before clearing it for broadcast and it had been amended during that process. They said they had received a copy of legal advice provided to QuickQuid which stated QuickQuids lawyers believed the ad was legally compliant, and had been satisfied on that basis.

Assessment

Upheld

The ASA noted the OFT Guidance on compliance with the Consumer Credit (Advertisements) Regulations 2004, section 3 "Content of Advertisements" stated "the information that must be included in credit advertisements ... The typical APR must be stated if the advertisement includes any of the following triggers ... incentive ... If an advertisement includes any incentive to apply for credit, or to enter into an agreement in which credit is provided, then it must display a typical APR ... In the OFT's view, other incentives which may trigger the typical APR would include ... 'cash within 24 hours of application'". We acknowledged that the OFT document was a guidance document and that whilst examples of what might constitute an "incentive" were provided in it those examples were not exhaustive, We consulted the OFT who said that, in their view, the claims "same-day funding" and "get the money you need today" were incentives which required the inclusion of a typical APR in the ad. We noted the CAP (Broadcast) TV Advertising Code required finance ads to be compliant with the Consumer Credit Regulations.

Because the ASA considered the ad contained clear incentives stating "same-day funding" and "get the money you need today" which were reinforced, in the context of the ad as a whole, by statements such as "Need money quickly?" and "if approved before 2.30 pm, you could have the money in your account the same day, or the next working day if approved after 2.30 pm. Remember, with QuickQuid you could have a five-minute application form, quick approval and same-day funding" and because the actress in the ad continued "Too many bills this month? Do what I did, visit QuickQuid.co.uk/TV and get the money you need today", we concluded that the ad should have displayed the typical APR (listed on the QuickQuid website as 2356%) in order to comply with the Code. In addition, because of the rate of the interest charged and the potential vulnerability of consumers likely to be attracted by the ad, we concluded that the ad was likely to mislead consumers by omission of information concerning the rate of interest.

The ad breached CAP (Broadcast) TV Advertising Standards Code rules 5.1.1, 5.1.2, 5.1.3 (Misleading advertising) and 9.8 (Finance and investment: lending and credit).

Action

The ad must not be broadcast again in its current form.

Adjudication of the ASA Council (Broadcast)