Background
Summary of Council decision:
Two issues were investigated, one was Upheld and one was Not Upheld.
Ad description
A TV ad for the Money Shop, a payday loan company, stated in the voice-over, "No cash until pay day when ..." The ad then showed a man not being able to fill his car with petrol, a woman breaking her key in the lock and a woman spilling a cup of coffee over her laptop. The voice-over continued, "No cash? No worries. A pay day loan from the Money Shop takes care of life's little emergencies. No hassle, no problem. With a Money Shop payday loan that will tide you over until your next payday. So whenever you need short-term cash for life's little emergencies come to the Money Shop." Actors portraying customers said "Brilliant, I've just made today my pay day", "That was so simple" and "Sweet, I just got £200 in no time."
On-screen text in a translucent box stated "Representative example: £100 for only £10 (normally £19.79*). Total amount repayable in a single payment of £110 in 30 days. Interest rate 10% (variable). 219.1% APR representative. Visit www.moneyshop.tv *print offer voucher and bring in store. T & C's apply. All loans subject to status & affordability. Customers must be18+." The text "219.1% APR" appeared larger than the other text.
Issue
1. A viewer challenged whether the representative example and the representative APR rate (RAPR) were sufficiently prominent.
2. The ASA challenged whether the representative example and the representative APR rate (RAPR) were sufficiently clear and legible.
Response
Instant Cash Loans (Money Shop) said the ad did not trigger a requirement to include the representative example because it did not mention an amount relating to the cost of credit. They therefore believed that they were not legally required to include the standard information by way of a representative example, although they chose to do so anyway.
Money Shop believed prominence should be determined by taking the context of the ad as a whole. They did not believe the example was unclear or that it breached any prominence rules because it appeared on a semi-transparent background. They believed the ad complied with Regulation 5(6)(a) of the Consumer Credit (Advertisement) Regulations 2010 (the Regulations) which required a representative example to be clear and concise. They believed the representative example was prominent because it was white text displayed against a black background and appeared on screen throughout the ad; they believed that gave viewers sufficient time to read it.
Clearcast pointed out that the RAPR figure was larger than the other legal text on screen and said they always required the RAPR figure to be more prominent than any other information as required by Regulation 6(2). They accepted the Money Shop's assurance that the ad complied with the Regulations and cleared the ad on that basis. Following the complaint, they believed the representative example should have been given greater prominence than any other information relating to the cost of credit in the ad and any indication or incentive of a kind referred to in Regulation 6(1). They said it was not clear whether the RAPR figure and the representative example should be the same size or whether one should be more prominent than the other and welcomed clarification on this.
Clearcast said the superimposed text passed their tests for height, length of hold and legibility and that because they were contained within a semi-opaque box, they were very clear. They did not consider the background to the text was distracting and therefore, the text did not need to be in an opaque box.
Assessment
1. Upheld
The ASA sought comments from the OFT on the Regulations.
We noted Money Shop's view that the ad did not trigger the requirement to include the RAPR or a representative example. However, we understood from the OFT that the amount of £10 quoted in the text "£100 for only £10" (which appeared within the representative example on screen) was, in their view, "an amount relating to the cost of credit" under Regulation 4(1) of the Regulations. Because of that, they considered that the ad did trigger the requirement to include a representative example which included the RAPR.
The OFT also considered that the full claim "£100 for only £10 (normally £19.79)" was also an incentive for the purposes of regulation 6(1)(b) which triggered the requirement to include the RAPR in the ad. Because we considered the ad included an amount relating to the cost of credit and an incentive, we therefore assessed whether the ad complied with the Regulations.
Regulation 5(1) required the standard information that made up the representative example to include the rate of interest, whether fixed, variable or both, the nature and amount of any other charge included in the total charge for credit, the total amount of credit and the RAPR. While the example did include all of that information, Regulation 5(6)(c), however, required that information to be presented together, with each item of information being given equal prominence. The RAPR "219.1% APR" was displayed in larger text, which we considered gave it more prominence than the remaining standard information.
Regulation 6(1)(b) required credit ads to include the RAPR when they included an incentive and Regulation 6(2) required that RAPR to be given greater prominence than the incentive. Regulation 5(6)(d) required that the standard information that made up the representative example be given greater prominence than information relating to a cost of credit or an incentive.
To comply with the Regulations, we therefore considered that the remaining standard information that made up the representative example should have been the same size as the RAPR and larger than the incentive "£100 for only £10 (normally £19.79)". Because it was not, we considered the representative example was not sufficiently prominent and concluded the ad breached the Code on this technical point.
On this point, the ad breached BCAP Code rule 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).
2. Not upheld
Guidance from the Broadcast Committee of Advertising Practice (BCAP) states where the background to text may be distracting (e.g. when it is moving or cuts from one view to another) it would normally be necessary to place the text on an opaque single-coloured block. The ad showed people in a variety of scenarios in which they were unexpectedly caught short of money. The text appeared on a semi-transparent colour block and we noted that it was possible to see those people through the colour block.
However, we considered the contrast of the white text against the semi-opaque background was sufficient to allow viewers to read that information. The text appeared on screen throughout most of the ad which we also considered gave viewers sufficient time to read the text and we considered it was sufficiently legible to viewers. While the action in the background could be seen, we did not consider that distracted viewers from the onscreen text. We therefore considered the RAPR and representative example were sufficiently clear and legible to viewers and concluded the ad did not breach the Code on this point.
On this point, we investigated the ad under BCAP Code rules 3.11 (Qualifications) 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
The ad must not appear again in its current form. We told Money Shop to ensure their advertising complied with the relevant consumer credit legislation.
