Background
Summary of Council decision:
Two issues were investigated, both of which were Upheld.
Ad description
An e-mail from Pounds to Pocket stated in the Subject line "Happy Birthday from Pounds to Pocket". Text in the body of the e-mail stated "... At Pounds to Pocket, we'd like to wish you the best on your special day! Now you can apply for the money you need to enjoy your birthday worry-free. Plus, take advantage of our special offer to you: Save 20% on your first scheduled payment if approved when you apply today for up to £2,000!† Simply use the promo code below". Footnote text stated "Terms and Conditions apply. All loans are subject to status, affordability and credit checks prior to approval. Over 18s only. †Loan amounts subject to individual status review and loan repayment history ...".
Issue
Citizens Advice Bureau challenged whether the ad was irresponsible because it:
1. encouraged consumers to use a short-term loan to fund birthday celebrations; and
2. promoted a casual, 'worry-free', attitude to taking out a short-term loan.
Response
1. & 2. CashEuroNetUK LLC t/a Pounds to Pocket acknowledged that taking out a short-term loan was a matter for serious consideration and explained that they were committed to selling their products responsibly. The practices they adhered to were outlined in their document "Global Policy on Responsible Marketing & Sales", a copy of which was submitted to the ASA for reference. They said they went to great lengths to ensure that ads were not targeted at individuals or groups for whom they would be inappropriate or detrimental, for example, children, and believed the content of their ads was socially and ethically responsible.
They explained that the ad in this case was designed to appeal to people who had shown previous interest in Pounds to Pocket's products and were already considering taking a short-term loan. The purpose of the congratulatory, birthday-based promotion was to show customers that their business was valued, and the applied discount was to be an additional birthday gift for them. They said the e-mail was not designed to tempt consumers to take a loan in a frivolous or ill-advised fashion purely on the basis of a birthday discount, but the idea of a 'birthday bonus' in the form of a 20% discount off the first payment reduced the pressure of re-payment. They explained that the reference to "money you need to enjoy your birthday worry-free" related to the comfort that a customer could take, knowing that they had enough money to cover essential costs. The customer could enjoy their birthday, "worry-free", having all the money they needed generally, not simply to fund birthday celebrations.
CashEuroNetUK believed it was common practice for businesses to send e-mails to their customers on birthdays or special occasions and understood that a reasonable and well-informed consumer would be familiar with this style of message. They would recognise that the purpose of the e-mail was to offer a discount for taking out a loan, not to incentivise them to use the loan in an irresponsible manner. They pointed out that all Pounds to Pocket ads provided information about the costs and risks associated with their products.
CashEuroNetUK believed an ad would not be the sole factor behind a customer's decision to take out a loan. Regardless, they said they would remove the e-mail from circulation.
Assessment
1. & 2. Upheld
The ASA noted the e-mail from Pounds to Pocket was sent to individuals celebrating their birthday and stated "… we'd like to wish you the best on your special day! Now you can apply for the money you need to enjoy your birthday worry-free". A 20% discount was offered on a first scheduled payment for those who applied on the day the e-mail was received and further text clarified that, if approved, the applicant's funds would be sent within 10 minutes.
We acknowledged the steps CashEuroNetUK took to try to ensure compliance with the CAP Code and other regulatory requirements, and noted the guidelines of the Global Policy on Responsible Marketing & Sales document. We considered, however, that the implication of the message, particularly through the text "you can apply for the money you need to enjoy your birthday worry-free" was that recipients of the e-mail should use Pounds to Pocket's loan services to fund birthday celebrations, and in doing so, could avoid the money worries that extra spending could bring.
We considered that taking a loan was a serious decision, which required thorough deliberation and the purpose of a loan was a key factor that should be taken into account when deciding whether a short-term, high-interest arrangement was appropriate. While possibly desirable, having money to spend on birthday celebrations was unlikely to be seen as essential, and by encouraging recipients to take advantage of the service through a special offer discount for immediate application, Pounds to Pocket had urged a decision, thereby limiting the amount of time those interested in a loan were able to give to proper consideration.
We acknowledged CashEuroNetUK's intention for the e-mail to appeal to those who were already interested in a loan, but considered that, had the e-mail been received only by those who fell into this category, the approach used (encouraging a loan for birthday spending) was unlikely to be acceptable.
We concluded that the e-mail was irresponsible, because it encouraged taking a short-term loan for frivolous spending and promoted the process of borrowing as trivial and without responsibility. We welcomed Pounds for Pocket's suggestion that the e-mail would be withdrawn.
The e-mail 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.
