Background

Summary of Council's decision:

Two issues were investigated, both were Not upheld.

Ad description

A radio ad, for a payday loans company, stated "The school trip the kids forgot to mention, the MOT just failed, the boiler that broke with a bang, there's always BishBoshDosh for when the piggy bank is a little starved. And because BishBoshDosh is all online, there's no paperwork. Just an easy to use, hassle-free website". Music played throughout and a song with the lyrics "The payday lender to help you get along BishBoshDosh.com, just get online and visit BishBoshDosh.com, BishBoshDosh.com".

Issue

The complainant challenged whether the ad:

1. was irresponsible, because it (and particularly the musical element) trivialised the nature of the service; and

2. was misleading, because it did not state an Annual Percentage Rate of interest (APR).

Response

1. BishBoshDosh did not believe the ad trivialised the nature of the service. They said the examples given outlined the situations where a payday loan might be useful and emphasised the ease of using the service once an applicant had decided that a payday loan was suitable for their needs. They believed the ad did not imply that the decision to borrow money should be taken lightly.

The Radio Advertising Clearance Centre (RACC) did not believe the ad suggested or implied that taking out a loan was a trivial activity. They felt the tone and style of the ad was no less flippant than other, similar ads for loan providers.

2. BishBoshDosh believed the ad did not need to specify the representative APR under regulation 6(1)(b) of the Consumer Credit (Advertisements) Regulations 2010 because it did not contain an incentive to apply for credit. They said the ad was intended to raise awareness of BishBoshDosh's services as a payday lender and invited potential customers to go online to find out more information. They pointed out that the representative APR was displayed clearly on the front page of their website, at the first point of application.

The RACC believed the ad did not require an APR because it did not contain any of the triggers of the Consumer Credit (Advertisements) Regulations that necessitated inclusion of the representative APR. These were any incentive to apply for credit, a comparative indicator or an appeal to those whose access to credit was limited.

Assessment

1. Not upheld

The ASA noted the ad gave examples of occasions when listeners might be interested in taking out a short-term loan, such as when their boiler broke or their car failed its MOT. We considered that the examples given constituted unexpected and essential purchases and did not imply that a loan should be taken out for frivolous reasons or encourage irresponsible spending on non-essential items. We noted that the voice-over stated, "… there's always BishBoshDosh for when the piggy bank is a little starved" and considered the reference to piggy bank implied money that was put aside for a rainy day or for unexpected purchases. We noted that the soundtrack included the lyrics "The payday lender to help you get along BishBoshBosh.com" but considered that it was made in the context of the examples given which could create cash-flow problems for some listeners.

We considered that, although the soundtrack was catchy and upbeat and was sung in the style of a pop song, given the content of the voice-over the ad not trivialise the act of taking out a loan. We therefore concluded that the ad was not irresponsible.

On this point, we investigated the ad under BCAP Code rule  1.2 1.2 Advertisements must be prepared with a sense of responsibility to the audience and to society.  (Social responsibility) but did not find it in breach.

2. Not upheld

We noted that the Consumer Credit (Advertisements) Regulations 2010 (the Regulations) required ads for credit to state the APR only in certain circumstances. We considered whether the requirements of the Regulations were triggered by the ad and noted that the ad did not indicate that BishBoshDosh would make credit available to listeners who might otherwise have restricted access to credit and did not indicate that BishBoshDosh offered more favourable terms than other creditors. We considered whether the ad included an incentive to apply for credit within the meaning of the Regulations, but concluded it did not. We considered that the statement relating to the application process, in particular "there's no paperwork. Just an easy to use, hassle-free website" was a description of the inherent features of the service rather than an incentive to apply for credit. We considered therefore that the ad was not required to state the APR under the Regulations.

We then considered whether the ad was misleading by omission in failing to state a representative APR, given the high rate of interest charged and potential vulnerability of those seeking a short-term loan. We noted that the ad did not include specific information on the terms upon which credit was available and instead directed listeners to the website where all information regarding the cost of borrowing was clearly presented. For those reasons, we concluded that the ad was unlikely to mislead listeners by not stating a representative APR.

On this point, we investigated the ad under BCAP Code rules  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  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) but did not find it in breach.

Action

No further action necessary.

BCAP Code

1.2     14.11     3.1     3.2    


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