Don’t delay paying attention to your compliance – delayed payment services and the CAP Code.

Giving consumers a choice of how they pay at your online check-out, such as paying in instalments or in 30 days’ time, increases the payment options available to potential customers.  However, you must always be upfront about exactly what consumers are signing up to.  As the popularity of these payment products is increasing rapidly, we’ve highlighted some of the key areas to consider when creating advertising for these products – most importantly, making sure your ads are responsible. 

This advice applies primarily to financial marketing communications that are not regulated by the Financial Conduct Authority (FCA) as those are subject to the FCA’s requirements, however, all financial marketing communications are subject to the rules that cover non-technical elements of communications; for example, serious or widespread offence, social responsibility and the truthfulness of claims that do not relate to specific characteristics of FCA-regulated financial products.

Make sure it’s easy to understand

Rule 14.1 in the CAP Code states that ads for financial products must be set out in a way that allows them to be easily understood by the audience being addressed and must ensure that they do not take advantage of consumers' inexperience. The ASA has yet to see many complaints about ads for these payment methods, and so there is little in the way of ASA precedent at this time, but it’s likely that a substantial proportion of consumers that use these methods of payment will be those who are financially inexperienced and so the terms, and the prominence and clarity of them, should reflect this.

Ads also must not mislead by omitting material information (rule 3.3) - material information will include information about the consequences of not keeping up with repayments.  Consumers should be aware from the outset if there will be late payment charges, or if their credit rating will be affected by applying or if payments are missed.  If any additional charges are applied, then these should also be clear and there should be no ‘hidden charges’.

Avoid any trivialisation

Marketers should be careful to ensure that the tone and content of their advertising does not make light of or play down the commitment involved in making a delayed payment in a short period of time or incurring a short-term debt.  There are many reasons why consumers might chose to make use of a delayed payment service and there may be occasions where, if a consumer can’t afford something today - they also cannot afford it in 30 days’ time. 

Consumers are often likely to spend more when they are not paying for items immediately.  Marketers should, therefore, also take care not to irresponsibly encourage consumers to make purchases that they cannot reasonably afford or to spend significantly more than they otherwise would – particularly when the products themselves are not strictly ‘essential’.

Take care with vulnerable groups

Consumers that have a poor/no credit history and/or low income, and may not be able to obtain other forms of credit, may be tempted to use these features where there are no credit checks.  Such payment services are also likely to appeal to younger consumers who are less financially experienced.  All ads must be socially responsible and so care should be taken to ensure that ads for these financial products don’t directly target groups that may be considered vulnerable.

During these difficult times, when people are more likely to be shopping online, it is vital that people aren’t encouraged into unsustainable debt. This is especially important in the current financial climate where people may not be in stable employment, and may find finances tighter than before the pandemic.

Don’t overplay the speed and ease

It is understandable that marketers will want to highlight the advantages of their product, including the simplicity of the application process and the speed at which consumers can access funds and make a purchase. But speed and ease of access should be referred to responsibly and proportionally.

Advertisers should avoid heavily promoting these aspects of these payment methods while downplaying less positive aspects, and should not otherwise encourage consumers to rush a decision to make a purchase using these methods of payment.

Get guidance when you need it

If you would like advice about a specific non-broadcast ad for delayed methods of payment, such as paying in instalments, CAP has a range of services to help you keep to the rules, including free bespoke Copy Advice, so please take a look on our website.   


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