ASA Adjudication on Caversham Finance Ltd
Caversham Finance Ltd t/a
5 Hercules Way
29 August 2012
Number of complaints:
A TV ad, for a company offering home furnishings on a credit basis, showed individuals in their home, having taken receipt of items such as a washing machine, a 3D TV and a sofa. The voice-over said, "At BrightHouse, we're making things a little bit easier by giving you the things you need right now and letting you pay for them a little bit at a time, either weekly, fortnightly or monthly. We offer quick and simple credit and a price match promise on everything, so you can be sure of a great deal. Enjoy it now and pay a little bit at a time." On-screen text stated "29.9% APR representative. Purchase restrictions outside store catchment areas. Subject to status. Terms and Conditions apply. Excludes internet prices, price to be verified with competitor".
The complainant challenged whether the ad was irresponsible, because it promoted some luxury and vanity products as essentials and encouraged people to take credit at a high rate of APR to purchase them.
Caversham Finance Ltd t/a BrightHouse (BrightHouse) said they were a responsible lender and were aware of their obligations under the advertising Code, as well as the requirements contained in the Consumer Credit (Advertisements) Regulations 2010 and in the relevant OFT guidance for creditors. They felt their ads complied with those requirements. They said the ad made clear in the on-screen text that BrightHouse's process made credit available subject to status. They said the legal wording was required to appear on screen for 5.4 seconds and appeared on screen for six seconds in the ad. They therefore considered that that provided sufficient time for the viewer to understand that credit was not available to all applicants. They said the APR of 29.9% was comparable to rates offered by other retailers and lenders. They felt the products featured during the ad (a television, sofa and washing machine) were regular items which were widely available both in High Street stores and online.
Clearcast said they supported BrightHouse's comments. They said BrightHouse and similar companies had been advertising their services on TV for a number of years and provided consumers with an affordable way of buying items over time; for example, when they might not have the finances for an item immediately available, but might need it. They said the APR was 29.9%, which was similar to other retailers' APRs for buying over time and also with current competitive interest rates for bank loans. They said the interest rate was prominently stated in a super, for which Clearcast received confirmation of compliance under the Consumer Credit Act. They agreed with the advertisers that the 'subject to status' super made it clear that not all applicants would be able to get the credit offer.
They said washing machines and sofas were not luxury items and were in nearly all homes in Britain. They acknowledged that a 3D TV was more of a luxury item but felt that BrightHouse was providing an affordable way of paying for that item using a credit offer, which was similar to many store credit offers. They did not think the ad was showing an irresponsible way of buying an item, but was merely showing a way of buying an item over time with an APR which was similar to that offered by many other retailers.
The ASA understood that BrightHouse offered the sale of goods through a credit arrangement, where customers could subsequently make repayments over a period of time, and noted that consumers were required to undertake a credit check to determine a level of affordability before making their first purchase. We considered that the ad clearly stated the representative APR and that consumers could decide on the basis of that information whether they wished to apply for credit through BrightHouse.
Although we accepted that some items featured in the ad might not be strictly essential, we considered that the main message that viewers were likely to take from the ad was that it was possible to purchase higher cost items on a finance package, but did not consider that the ad encouraged people to take on an unaffordable amount of credit to purchase the featured items or other luxury or unessential items. We therefore concluded that the ad was not irresponsible.
We investigated the ad under BCAP Code rule 1.2 (Responsible advertising), but did not find it in breach.
No further action necessary.