Payday loan ad banned for not giving 1058 percent interest rate due prominence
The ASA has banned a TV advert for the “Cash On Go” brand after it upheld two grounds of complaint against it.
The TV ad cannot be shown again
The ad featured a prominent promise that its loans could be repaid in multiple instalments, which the ASA held to be misleading on the basis that most cimilar companies allowed payments in instalments.
It also ruled that the APR rate of 1058 per cent was not sufficiently prominent.
The ruling follows pressure on the industry after a Whitehall summit involving the Financial Conduct Authority earlier this year.
The sector is set to face tougher regulation when the FCA takes over control next April, with additional restrictions to advertising and marketing expected to be put in place, with one option apparently including an outright ban on advertising.
“Although we understood that flexible repayment options were likely to be in the minority, we considered that the claim "payday loan companies expect you to repay your loan in one big payment" implied that all payday loan companies (or those offering short-term loans) required the entire sum to be re-paid in a single repayment, when this was not the case. We therefore concluded that the ad was misleading,” the ASA said in its adjudication.
The ASA said that incentive information about multiple repayments was presented in capital letters at the start of the relevant sentence, rendering the later APR details less prominent.
“Considering the ad in its entirety, we considered that the RAPR was not more prominent than the trigger information and therefore concluded that the ad breached the Code,” the ASA concluded.
The ASA has ruled that the ad cannot appear again in its current form, and had advised the company to ensure that future ads did not imply they were the only short-term loan company offering multiple repayments. It added that it has reminded the company that the RAPR needed to be more prominent that the trigger information.