The ASA has banned yet another advertisement
for payday loans. Financial (UK) Ltd (trading as
'FirstPayDayLoanUk') was held by the ASA to have breached a
number rules contained in the CAP Code by sending text messages to
consumers, such as:
"Hi Mate hows u? I'm still out in town, just got
£850 in my account from these guyswww.firstpaydayloanuk.co.uk".
A number of complaints
centred on the social responsibility implications of the
advertisement. The ASA found that the phrase "I'm
still out in town" would imply to a recipient consumer
that a loan had been spent on a social day out.
The social responsibility
aspects of payday loans has the caught both the ASA and the
OFT's eye recently and so it is not surprising that the ASA
considered that it was inappropriate and irresponsible to promote a
social life funded by short-term loans.
The Code requires marketing
communications to be clearly identified as such (Rule 2.1), and not
to be misleading (Rule 3.1). Furthermore, the Consumer Protection
from Unfair Trading Regulations 2008 also prohibits a business from
falsely holding itself out as a consumer.
The ASA held that, in breach
of the Code, the advertisements were not clearly marked as
marketing communications and indeed, in light of the informal tone,
would likely be considered by consumers as personal messages.
Interestingly the ASA's decision was also influenced by the
fact that FirstPayDayLoanUk had used a standard UK phone number to
send the texts.
The ruling compliments various other decisions and commentary
made recently by both the ASA and the OFT concerning the promotion
and marketing of payday loans. It appears that the social
responsibility aspects are of particular concern and advertisers
should take care to avoid common pitfalls when advertising in this
highly regulated and contentious area.
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Following extensive conversations over the last 18 months, the Financial Conduct Authority (FCA) has launched a consultation to clarify its position in relation to financial promotions on social media.
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