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Consumer Credit Advertising

Are your consumer credit ads compliant?

Published on 03 April 2014

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by Committee of Advertising Practice


London, England

Committee of Advertising Practice
Committee of Advertising Practice

Marketers should already be aware that the Financial Conduct Authority (FCA) took over regulation of consumer credit from the Office of Fair Trading on 1 April 2014; companies offering services such as payday loans, credit cards, hire purchase and debt management or advice should now be registered with the FCA. If you’re unsure of what you need to do, the FCA has published a guide for consumer credit firms who are new to FCA regulation.

The FCA has introduced new conduct rules which include requirements for credit ads; many standards have been carried across from the Consumer Credit Act and OFT guidance but there are some additional rules for debt management firms and high-cost short term credit (payday) lenders.  For example, there is now a requirement for a risk warning in payday loan ads as well additional guidance clarifying whether references to “speed” or “ease” constitute an incentive triggering inclusion of an APR. More information can be found on the FCA website.

What can the ASA deal with?

These changes impact on how the Advertising Standards Authority (ASA) deals with complaints about credit ads. The extent to which the ASA covers the advertising of financial products is limited; technical aspects of non-broadcast advertising, such as APRs and representative examples, are subject to statutory control by the FCA and any complaints we receive about these issues are forwarded onto them.  However, the ASA considers all complaints about “non-technical” aspects of ads in all media, for example, offence, social responsibility, fear and distress and competitor denigration. The ASA also assesses all complaints about broadcast ads and liaises with the FCA on technical matters covered by their rules; the BCAP Code requires ads to comply with relevant legislation. Marketers should therefore ensure that ads comply with both FCA and CAP/BCAP requirements.

Ensuring your ads are socially responsible

In particular, marketers should ensure that credit ads are socially responsible; the last 12 months has seen a large number of complaints submitted to the ASA about ads for payday lenders. As a result, CAP recently published an AdviceOnline entry for marketers on what they need to do to ensure their payday loan ads are responsible.

When assessing the responsibility of ads, the ASA is likely to consider issues such as the undue emphasis on speed and ease of access, the targeting of vulnerable groups and whether the ad could be seen to trivialise taking out a loan. On that last point, the purpose of the loan might be a key factor in the ASA’s assessment of complaints, but the creative treatment might also play a role, for example, the use of animation, puppets, humour etc.

Marketers should avoid implying that loans are appropriate for frivolous purchases, such as shopping or leisure activities.  The ASA recently ruled (Stop Go Networks Ltd t/a Payday Pig) that references to “a weekend away” and “a slap up meal” were problematic.  More likely to be acceptable are references to purchases that are considered reasonable, for example fixing a broken boiler or car, or home repairs.  Ads should also not give the impression that loans are a solution to financial difficulties or a suitable method of resolving wider financial concerns, as found in a recent case involving Instant Cash Loans Ltd t/a The Money Shop . Use of a payday loan by those in need of money to cover occasional unexpected shortfalls between paydays is a more suitable approach.

The tone of advertising should not trivialise taking out a loan. Although it might be a legitimate description of the application process, a disproportionate emphasis on speed and ease of access compared to interest rates is likely to be considered problematic.  This is because such an approach might encourage consumers to make an ill-considered or rushed decision about borrowing.  This is illustrated in the ASA’s ruling against PDB UK Ltd t/a CashLady.

As always, the Copy Advice team is happy to help with any questions and review copy for consumer credit ads in relation to non-technical matters. You can call us on 0207 492 2100 or submit your copy online, here.


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Posted 2014-04-03 16:44:00