Ad description
A text message that stated "Hi, need a quick loan £100 upto £25000, 98% Acceptance Rates! No credit checks, CCJ's and defaults OK. Visit www.loan-monarch.co.uk Now or text STOP".
Issue
Citizens Advice Bureau challenged whether the ad was irresponsible because it encouraged consumers who might have been refused loans elsewhere, because of their financial circumstances, to take out a loan.
Response
HotPond Media Ltd t/a Loan Monarch stated that they had now ceased using SMS marketing campaigns for the service. They explained that they were a loans broker with a selection of lenders on their panel, including Amigo Loans who were a guarantor lender. They stated that this meant that a county court judgment (CCJ) or default would not be the deciding factor in getting a loan approved, as long as the borrower had a guarantor. Loan Monarch asserted that they should have made it clearer that the 98% acceptance rate only applied to loans facilitated through access to a guarantor.
Loan Monarch explained that the typical consumer who received the ad would have already applied for an unsecured loan on an alternative website, and that this was how their contact details were obtained. They stated that the ad was sent in response to that application to inform customers that an alternative loan option might be more suitable, such as an unsecured loan facilitated through a guarantor where affordability is taken into consideration.
Assessment
Upheld
The ASA acknowledged that the ad contained information that would be of interest to those consumers who had previously been refused loans because of their financial history. We noted that it had been sent to consumers who had previously applied for a loan and was advertising a different type of product that may be more suitable for their situation. We considered that it had therefore been targeted towards those who could be more financially vulnerable. Although we noted that the phrase "No credit checks, CCJs and defaults OK" served as a factual description of the type of credit that Loan Monarch could offer through guarantor lenders, and informed consumers that this service was available through Loan Monarch with a good chance of being accepted, we considered that it appealed to those with poor financial circumstances and condoned borrowing for those who might not be able to manage repayment, and that these consumers in particular were likely to have received the message. We therefore concluded that the ad was irresponsible.
The ad breached CAP Code (Edition 12) rule 1.3 1.3 Marketing communications must be prepared with a sense of responsibility to consumers and to society. (Social Responsibility).
Action
The ad must not appear again in its current form. We told HotPond Media Ltd to ensure that future ads did not encourage those who might not be able to manage repayments to take out a loan.
