ASA Adjudication on Cash Finance Direct Ltd

Ad

A mailing from Horizon Finance addressed to the recipient stated "Congratulations! - Your application was passed to us by a company that you applied to last year. Even though you may have been refused credit in the past we have pre-processed your application and feel sure that we can accept you for an Instant Cash Loan." The mailing was sent in a white window envelope with no return address or identity of the sender.

Issue

1. A recipient challenged whether the mailing complied with the CAP Code. She had not previously applied for a loan and was concerned that her identity may have been cloned and her credit worthiness affected.

2. The ASA challenged whether the envelope made clear that it contained marketing material.

CAP Code

Response

1. Horizon Finance said their data sources provided them with details of clients who had applied for a loan in the past. They said some of those applications might have been made online, through money and loan comparison sites, for instance, where the process was very brief and less memorable but where applicants did, nevertheless, give their permission for their details to be passed on to third parties. Horizon Finance said each data source they dealt with had a contractual guarantee that the clients whose information they passed on to them had opted in to receive promotional information. They said that, because of confidentiality agreements, their data suppliers were unable to disclose the source of the recipient's details. However, Horizon Finance said they had not yet had an instance where they had been unable to prove that permission had been given. They said that, in any case, no credit searches were performed without the express permission of the applicant, so the recipient's credit worthiness would not have been affected. They confirmed that they had now removed the recipient's details from their mailing lists.

2. Horizon Finance said they had recently experienced difficulties with their envelope suppliers and it appeared that, on this occasion, one of the temporary envelopes they had substituted for a short period of time may not have contained information such as Horizon's name and return postal address. They said they had now put further mailings on hold until the situation was rectified.

Assessment

1. Upheld

The ASA welcomed Horizon Finance's assurance that they had now removed the recipient from their mailing lists. We considered, however, that recipients were likely to be concerned that the mailing stated that details of a loan application they had not made had been passed on to Horizon Finance. We reminded Horizon Finance that the CAP Code placed ultimate responsibility for the accuracy of marketing material on the advertiser. Because Horizon Finance had been unable to show that the recipient had previously applied for a loan, we concluded that the mailing was misleading.

On this point, the ad breached CAP Code clauses 3.1 (Substantiation) and 7.1 (Truthfulness).

2. Upheld

We concluded that the envelope should have been clearly marked to show that it contained marketing material to avoid any confusion or ambiguity about its status.

On this point, the ad breached CAP Code clauses 7.1 (Truthfulness) and 22.1 (Recognising marketing communications).

Action

We told Horizon Finance to ensure that mailings did not suggest that recipients had applied for financial products when they had not and to ensure that clients had given their consent to be contacted. We also told them to ensure envelopes were clearly marked to show that they contained marketing material.

Adjudication of the ASA Council (Non-broadcast)