ASA Adjudication on Borro Ltd

Ad

A TV ad for short-term loans from Borro.com showed cartoon images of a man and a woman. A voice-over stated "If you need money in a hurry you could always sell your valuables. Trouble is, it's not the best time to sell and once they're gone, they're gone. So why not visit borro.com ... We could look after your valuables and transfer you a lump sum and when you repay your loan she'll get everything back." On-screen text stated "Over 18's only, conditions apply."

Issue

1. A viewer challenged whether the ad was misleading because it did not state that there was substantial interest to pay on the loans.

2. The ASA challenged whether the ad complied with the Consumer Credit Act and the Consumer Credit (Advertisements) Regulations.

BCAP TV Code

Response

Borro.com (Borro) said they had obtained legal advice in order to ensure the ad complied with the TV Code and the Consumer Credit Act. They provided extracts of correspondence exchanges between themselves, their legal adviser, their advertising agency and Clearcast relating to whether the ad needed to state an annual percentage rate (APR) and whether the ad constituted an incentive to take out a credit agreement. Borro said the investigated ad was broadcast for approximately two weeks at the beginning of 2010 but that there were no further plans to run it again.

Clearcast said that, when considering ads for loans, they asked advertisers to ensure they were checked under the Consumer Credit Act by an appropriately qualified individual. They said they had relied on Borro's assurance in this case. They said they were aware of an ASA adjudication, published in October 2009, where a TV ad was found in breach of the TV Code for not stating an APR, but that their approval of Borro's ad pre-dated that adjudication.

1. Borro said their legal adviser did not regard the phrase "Money in a hurry" as an incentive to take credit and, therefore, saw no need for the ad to state an APR. They said they believed "incentive" was widely regarded as a gift or monetary inducement to take out a credit agreement.

2. Borro reiterated that they had obtained legal advice to ensure the ad complied with the Consumer Credit Act and Consumer Credit (Advertisements) Regulations and that advice had been that the ad did not need to state an APR. They said subsequent Borro ads had stated an APR because they claimed Borro would lend more than their competitors. They said the ad explained they would lend money by looking after a customer's valuables and returning them when they repaid their loan, which they believed made clear that security was required.

Assessment

1. Upheld

The ASA noted the Office of Fair Trading (OFT) Guidance on compliance with the Consumer Credit (Advertisements) Regulations 2004 stated that an ad must state a typical APR if it included an incentive to apply for credit. We spoke to the OFT. We considered that the reference "need money in a hurry" was an incentive to obtain credit which required the inclusion of a typical APR. Because it did not, we concluded that the ad was misleading.

2. Upheld

We noted that, as well as the APR issue discussed in point 1. above, the Consumer Credit Act 2006 and Consumer Credit (Advertisements) Regulations stated that the advertiser name must be a name specified in the company's consumer credit licence and that an ad needed to state that security was required and the nature of that security. We noted that the ad referred to looking after a customer's valuables but did not explicitly state that security was required or what that security would comprise. We also noted that the name borro.com was not one of the names specified on the company's consumer credit licence. Because of those two points, in addition to the ad not stating a typical APR, we considered that the ad did not comply with the Consumer Credit Act and the Consumer Credit (Advertisements) Regulations and concluded, therefore, that it was in breach of the TV Code.

On points 1. and 2., the ad breached CAP (Broadcast) TV Advertising Standards Code rules 5.1.1, 5.1.2 and 5.1.3 (Misleading advertising) and 9.8 (Lending and credit).

Action

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

Adjudication of the ASA Council (Broadcast)