Ad description
A direct mailing from Cash Converters (UK) Ltd stated "Dear Customer, Summer time and the living is easy [Image of music notes]. We wish it was - summer holidays, kids to entertain, new BBQ to buy, the list never ends! At Cash Converters we are here to help. We have all sorts of ways of raising that bit of extra money that could go a long way towards helping you out, and who knows, maybe even go towards a 'Kiss Me Quick' hat for the beach! ... So if you need to raise some cash, we could have a solution tailored to suit you - whether it be a Payday Loan, repayable within 28 days, a Personal Loan, repayable over a longer period of typically 6-7 months, a Pawnbroking agreement on goods of value, or even a good old Buy Back ...".
Small text at the bottom of the letter stated "Warning: Late payment can cause serious money problems. For help, go to [website address for Money Advice Service]. Authorised and regulated by the Financial Conduct Authority for consumer credit activity. Subject to status and affordability. Minimum age 18. Proof of ID required. Bank account required. Full details in-store".
Issue
The recipient challenged whether the ad was irresponsible, because the references to "summer holidays," "kids to entertain," "new BBQ to buy" and "maybe even go towards a 'Kiss Me Quick' hat for the beach" encouraged frivolous spending.
Response
Cash Converters said the mailing was designed to refer to the range of facilities offered by Cash Converters, which included retail as well as financial services. They pointed out that a risk warning was included in the ad and that, as part of their affordability procedures for financial service products, they would not lend money to someone who did not have the ability to pay it back. They said their customers did not always have access to other areas of mainstream credit and that summer holidays could be an expensive time, particularly if unexpected bills arose. They said the reference to the "Kiss Me Quick" hat related to buy backs, which were not considered to be a financial service. They supplied a breakdown for their total business showing the proportions made up of the different products they offered.
Assessment
Upheld
The ASA noted that Cash Converters offered several different products. The data they supplied showed that buybacks accounted for a significant majority of their business. Because of the terms Cash Converters applied to these, the buybacks offered by Cash Converters were not subject to current consumer credit rules. However, ads for these and other products offered by Cash Converters would of course still need to comply with the CAP Code. The ad promoted Cash Converters as offering "all sorts of ways of raising ... extra money," which included payday loans, personal loans and pawnbroking services, all of which fell within the scope of the consumer credit regime. We considered consumers were unlikely to distinguish between the products with which each spending suggestion was supposed to be linked.
We considered that any loan or advance should be taken only after careful consideration and that marketers should take care to advertise those products responsibly. We noted that the risk warning at the bottom of the ad had been included. This was now a requirement stipulated by the Financial Conduct Authority's Consumer Credit Sourcebook for financial promotions relating to high-cost, short-term credit and the potentially serious consequences of not meeting the terms of that type of loan product.
We considered that summer holidays, entertaining the children, buying a new barbeque and a "Kiss Me Quick" hat for the beach were all purchases that were unlikely to be considered essential purchases and that the references to them suggested that taking out a loan or other type of cash advance for them was something that could be approached lightly. We considered that, by suggesting that loans or other types of cash advance could be used to fund non-essential purchases, the ad encouraged frivolous spending. Because of that, we concluded that it was irresponsible and in breach of the Code.
The ad breached CAP Code (Edition 12) rule 1.3 1.3 Marketing communications must be prepared with a sense of responsibility to consumers and to society. (Responsible advertising).
Action
The ad must not appear again in its current form. We told Cash Converters (UK) Ltd to ensure that their future advertising was prepared with a sense of responsibility to consumers and to society.
