Background
Summary of Council decision:
Two issues were investigated, both of which were Not upheld.
Ad description
A radio ad for a home credit loan provider, Provident Personal Credit Ltd, featured a voice-over that stated "Who provides people with an alternative to a payday loan? Who provides people with loans of up to £500 in cash delivered to their front door? And who provides people with a loan they can pay back weekly. Provident. The one's with 'provide' in the name. Visit provident.co.uk and we could provide you with the help you need. Compare the price of home collected and other cash loans available in your area at lenderscompared.org.uk. Representative three nine nine point seven percent APR. See our website for full terms and conditions. Loans subject to affordability.”
Issue
The complainant challenged whether:
1. the ad was misleading and irresponsible because the claim "Who provides people with an alternative to a pay day loan" suggested that the advertiser's home credit loan, which had an APR which the complainant believed was very high, was a better means of obtaining credit; and
2. the voice-over's reference to the 399.7% APR figure was ambiguous and therefore misleading, because it was read as "three nine nine point seven".
Response
Provident Personal Credit Ltd stated that the ad was no longer being broadcast. However, they stated that the ad was comparing their home collected credit against payday loans, and believed that it was not misleading or irresponsible to make such a comparison. They stated that the ad was aimed at consumers who were denied cheaper forms of credit, and that it made consumers aware of their home credit product as an alternative to payday products. Furthermore, the ad referred to their website and a comparison site, which consumers could visit to find out more about home credit, including the benefits when compared against other cash loans.
Provident stated that the ad did not claim that their home credit was a better means of obtaining credit. They believed that it pointed out that there were substantive qualitative differences between payday loans and home credit loans, which should not be disregarded because, although their APR was considerably less than those of many payday lenders, their APRs were similar compared to more mainstream, lower cost credit.
Provident Personal Credit stated that their method of lending a home credit was more responsible and of greater benefit to consumers than payday loans. Their process involved an agent who met with the customer at their home and gained a personal knowledge of their circumstances before issuing a loan. The agent would provide the customer with a verbal and written explanation of the product, conducted an affordability assessment and provided documentation containing the APR and full details of the amount borrowed, the total amount of credit and weekly payments scheduled. together with the loan agreement and information on the relevant regulations. The loans were repayable over a longer term of between 23 and 52 weeks, by means of small, affordable weekly payments, the amounts of which were agreed with the customer beforehand and collected by the agents in person. Furthermore, in the event that a customer missed a repayment or several repayments, no additional charges or fees applied. In those circumstances, the customer could discuss any difficulties directly with their agents and revise the repayment terms to make it more manageable.
Provident Personal Credit stated that the APR of 399.7% was made sufficiently clear in the voice-over, with a decimal point after the first three numerical figures.
The Radio Advertising Clearance Centre (RACC) stated that the ad positioned the advertiser and product as a cheaper alternative to payday loans. Given that many payday loan providers had representative APRs well over 1,000%, the comparison did not seem inappropriate or socially irresponsible.
The RACC stated that because the APR was stated as "three nine nine point seven", listeners would understand that that meant 399.7%. They believed this was an easier way of stating the APR than "three hundred and ninety nine point seven", as it would require less attention without losing any of the meaning.
Assessment
1. Not upheld
The ASA noted that the voice-over in the ad stated "Who provides people with an alternative to a payday loan" and "Compare the price of home collected and other cash loans available in your area at lenderscompared.org.uk". We considered that this would be interpreted to mean that Provident Personal Credit's home credit was suitable for circumstances in which a payday loans might be a means of getting a cash loan and that consumers could visit the comparison website to obtain further information.
We acknowledged the differences Provident Personal Credit had identified between the two different cash loans, which they considered made their home credit loan more beneficial and responsible. We noted that the home credit loan could not be obtained online, as distinct from many payday loans, and that the application process involved an agent making a home visit to the consumer, where an affordability assessment was conducted as well as a written and verbal explanation of the product. We noted that the ad did not claim that the advertised loans would be cheaper than payday loans in most or all circumstances.
We concluded that the ad did not misleadingly or irresponsibly suggest that the advertiser's home credit loan was a better means of obtaining credit to payday loans.
On this point, we investigated the ad under BCAP Code rules 1.2 1.2 Advertisements must be prepared with a sense of responsibility to the audience and to society. (Social Responsibility), 3.1 3.1 Advertisements must not materially mislead or be likely to do so. (Misleading Advertising) and 3.38 3.38 Advertisements that include comparisons with unidentifiable competitors must not mislead, or be likely to mislead, consumers. The elements of the comparison must not be selected to give the advertiser an unrepresentative advantage. (Comparisons), but did not find it in breach.
2. Not upheld
We noted that the voice-over clearly stated "point" after the first three numerical figures of the representative APR. We considered that this made sufficiently clear that the representative APR was 399.7% and that the ad was not misleading.
On this point, we investigated the ad under BCAP Code rules
1.2
1.2
Advertisements must be prepared with a sense of responsibility to the audience and to society.
(Social Responsibility),
3.1
3.1
Advertisements must not materially mislead or be likely to do so.
and
3.2
3.2
Advertisements must not mislead consumers by omitting material information. They must not mislead by hiding material information or presenting it in an unclear, unintelligible, ambiguous or untimely manner.
Material information is information that consumers need in context to make informed decisions about whether or how to buy a product or service. Whether the omission or presentation of material information is likely to mislead consumers depends on the context, the medium and, if the medium of the advertisement is constrained by time or space, the measures that the advertiser takes to make that information available to consumers by other means.
(Misleading Advertising), but did not find it in breach.
Action
No further action necessary.
