Background
Summary of Council decision:
Two issues were investigated, both of which were Upheld.
Ad description
A TV ad for a pay-day loan service was viewed in February 2012, and was presented in the style of a news report. The presenter stated "In other news: Kim a teacher from Aberdeen wanted to avoid her banks unauthorised overdraft fees, so she borrowed £70 at a cost of £20.65 payable on her next pay day. Nice!" Large on-screen text stated "SHE BORROWED £70 AT A COST OF £20.65". On-screen text at the bottom of the screen during the ad stated "£80 loan for 28 days = £23.60 charges. Total of £103.62 repayable after 28 days in a single payment. REPRESENTATIVE APR = 2814.2%."
Issue
1. Nineteen complainants, who did not believe the superimposed text was legible, objected that the ad was misleading.
2. One complainant challenged whether the APR was sufficiently prominent in the ad.
Response
1. WageDayAdvance Ltd (WageDayAdvance) said they were satisfied they had complied with the text size requirements.
Clearcast said they believed the superimposed text complied with BCAP guidelines in terms of size and duration of hold.
2. WageDayAdvance said they were satisfied they had followed the advice they took in relation to the prominence of the APR.
Clearcast said they believed the APR was more prominent than any other piece of credit information, in line with regulatory requirements.
Assessment
1. Upheld
The ASA noted that the superimposed text complied with the BCAP guidelines in terms of size and duration of hold. However, we also noted that the Code required advertisers to present qualifications clearly. We noted the complainants said they were unable to read the text, and that many described it as "squashed". We considered that the superimposed text did have a squashed appearance, and that consumers viewing that ad on TV might not be able to read it. We also noted this was in contrast to other on-screen text in the ad, such as "SHE BORROWED £70 AT A COST OF £20.65" in which the text was large and easy to read. We noted the superimposed text was the only place in which the APR appeared in the ad, and considered this was information that could affect the decision of consumers to take out a loan. Because the superimposed text was not presented clearly, and contained information that we considered could be material to a consumer's transactional decision, we concluded that the ad was misleading.
On this point the ad breached BCAP Code rules
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) and
3.11
3.11
Qualifications must be presented clearly.
BCAP has published Guidance on Superimposed Text to help television broadcasters ensure compliance with rule
3.1
3.1
Advertisements must not materially mislead or be likely to do so.
. The guidance is available at:
http://www.cap.org.uk/~/media/Files/CAP/Help%20notes%20new/BCAP_Advertising_Guidance_Notes_1.ashx
(Qualification).
2. Upheld
We noted that Clearcast and WageDayAdvance believed the APR was sufficiently prominent. However, we also noted that the Consumer Credit (Advertisements) Regulations 2010 stated that, where a credit advertisement included an amount relating to the cost of the credit, the ad was required to contain a representative example that must include the APR. We also noted the Regulations stated the example must be more prominent than any other information relating to the cost of the credit in the credit advertisement.
We consulted the Office of Fair Trading (OFT) for an opinion, and they confirmed that if an ad contains trigger information then it must also contain a representative APR, and where the trigger is financial information it must include this as part of a representative example. They considered that the presenter stating "she borrowed £70 at a cost of £20.65 payable on her next pay day" and the on-screen text "SHE BORROWED £70 AT A COST OF £20.65" both constituted trigger information. In their opinion the on-screen APR and other representative information was not more prominent than this trigger information.
We noted that the voice-over in the ad stated "[S]he borrowed £70 at a cost of £20.65 payable on her next pay day" and that large on-screen text stated "SHE BORROWED £70 AT A COST OF £20.65". As these statements both related to the cost of the credit we considered that the representative example, including the APR, should have been more prominent than these statements. We noted that the superimposed text that included the APR appeared throughout the majority of the ad, and was on-screen when the voice-over and larger on-screen text referred to the cost of the credit. However, we also noted that this was the only place in which the APR appeared during the ad, that the presenter did not refer to the APR and that the superimposed text was much smaller than the on-screen text featuring the cost of credit. We therefore considered that, in the context of the whole ad, the APR was not more prominent than the other information relating to the cost of the credit. We therefore concluded that the ad breached the Code.
On this point the ad breached BCAP Code rules
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),
3.11
3.11
Qualifications must be presented clearly.
BCAP has published Guidance on Superimposed Text to help television broadcasters ensure compliance with rule
3.1
3.1
Advertisements must not materially mislead or be likely to do so.
. The guidance is available at:
http://www.cap.org.uk/~/media/Files/CAP/Help%20notes%20new/BCAP_Advertising_Guidance_Notes_1.ashx
(Qualification) and
14.11
14.11
The advertising of unsecured consumer credit or hire services by consumer credit businesses or consumer hire businesses and / or credit brokering businesses or related credit services, such as debt counselling or debt adjusting is acceptable only if the advertiser complies with the financial promotions requirements imposed by FSMA and the FCA's rules set out in Chapter 3 of CONC.. The requirements for financial promotions set out in Chapter 3 of CONC do not apply: (a) where the credit is available only to a company or other body corporate (such as a limited liability partnership); (b) where a financial promotion is solely promoting credit agreements or consumer hire agreements or P2P lending agreements for the purposes of a customer's business; (c) to a financial promotion to the extent that it relates to qualifying credit or (d) it falls within the definition of an excluded communication as set out in the FCA's handbook. If the applicability or interpretation of these rules or provisions is in doubt, advertisers may contact the FCA. The FCA does not check financial promotions for compliance with the CONC rules before they are published. Such advertisements that involve distance marketing must also comply with the Financial Services (Distance Marketing) Regulations 2004 (as amended). Other distance-marketing financial advertisements are covered by the FCA Handbook.
(Lending and credit).
Action
The ad must not appear again in its current form.
