A TV ad for the Fluid credit card, seen on 15 February 2020, featured a conversation between a hairdresser and a client in a salon. The client asked, “You taking the kids out this weekend?”, to which the hairdresser replied, “Things are a bit tight. I’m paying too much interest on my credit card.” The client responded, “Do a balance transfer. Fluid gives you nine months to pay it off, interest free.” The salon then turned into a disco with club music, flashing lights and people dancing, before returning to its usual setting. The hairdresser stated, “They’d probably say no”, and the client replied, “With Fluid you can see if you’re likely to be accepted before you apply”, as the salon returned to a disco setting.
IssueThe complainant challenged whether the ad was socially irresponsible because it encouraged those struggling to pay off debts to take out further credit.
New Day Ltd and MI Money Ltd submitted a joint response. They said the purpose of the ad was to show consumers who were paying interest charges on other credit card balances unnecessarily how they might reduce the cost of servicing their debts by moving interest-bearing balances to a product with a 0% interest-free period. They said this allowed consumers to save interest and use the time during the 0% offer period to make headway against any outstanding borrowing. Taking such action was commonly presented as sound financial advice by stakeholders in the debt advice sector, who noted that a key first step in clearing problem debt was to lower (as far as possible) the interest charges associated with any balances owed.
New Day and MI Money said the ad contained no incentives or encouragement to increase spending and no reference was made to making further purchases. Rather, two important points were presented. The first was that interest costs could be saved by moving interest bearing balances to 0% offers as a good way to save overall borrowing costs, and the second was that consumers who wished to take that action could check their eligibility for the product without risk. The latter removed the barrier for those consumers who wished to reduce their debt costs in that way but who were put off by the risk of a failed application. New Day and MI Money said the ad included prominent on-screen messaging setting out the applicable APR and relevant disclosures. They did not believe the ad suggested that the customer was celebrating the idea of having a new credit line they could use irresponsibly. Rather, the timing of the celebrations were to mark their understanding that they could save interest costs and check their eligibility.
Clearcast said they understood that the product offered customers who were paying high interest on their credit cards a balance transfer that was interest-free for nine months. They said the product also offered customers a credit check to ascertain whether or not they would be accepted before applying. They did not believe the ad encouraged those struggling to pay off debts to take out further credit as it allowed customers to manage their finances responsibly with a balance transfer.
Clearcast said the woman in the ad was not being encouraged to take out more money to take her kids out, rather it suggested an interest-free loan would make her monthly costs lower and therefore easier to manage. Then, at the end of each month she would have enough of her own money left to do activities such as take her kids out. They said the ad offered consumers the opportunity to see first whether they would be accepted, and that they advised the advertiser to include the representative APR variable in the on-screen text along with any applicable fees, to ensure that consumers were made aware of their financial responsibilities.
The ASA noted from the ad that paying too much interest on a credit card was the hairdresser’s reason for not being able to take her kids out at the weekend, and that the client’s solution to the matter was to transfer her current interest-bearing balance to a Fluid credit card, which was non-interest bearing for the first nine months. We considered that the focus of the ad was therefore to encourage consumers to manage their debt and avoid paying interest charges for an initial period by transferring their balance to the advertised card.
We noted the salon turned into a disco after the client’s suggestion, which we considered represented the hairdresser’s response to hearing that she could pay less interest and get on top of her credit card balance. We did not consider that thought to imply the hairdresser was celebrating having taken out further credit. The hairdresser then expressed doubts about whether or not Fluid would accept her credit card application, after which the client stated, “With Fluid you can see if you’re likely to be accepted before you apply”, and the salon returned to a disco scene. Given that declined applications for credit often impacted a consumer’s credit file, we considered the focus of that scene was to notify consumers that Fluid were able to give potential customers an idea of whether or not their application was likely to be accepted before they completed their application. It was commonly understood that moving a credit card balance to a credit card with low or 0% interest could help pay off the balance faster, therefore helping to reduce debt. Given the focus on transferring interest-bearing balances to a product that bore no interest for an initial period and which allowed consumers to check whether they were likely to be accepted before they applied, we concluded that the ad was not irresponsible and did not therefore breach the Code.
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.
No further action necessary.