Background
Summary of Council decision:
Two issues were investigated, both of which were Upheld.
Ad description
A text message, from www.spends4u.co.uk, stated "... could approve you for a loan of up to £1000 today. No matter what your circumstances. Fast and completely online. To opt out text End".
Issue
Citizens Advice Bureau challenged whether the ad:
1. was irresponsible, because it encouraged consumers to take out a loan, regardless of their financial circumstances; and
2. was misleading, because it implied consumers could be accepted for a loan, regardless of their financial circumstances.
Response
1. & 2. Sandhurst Associates Ltd explained that the text message had been sent to a number of individuals after Sandhurst had received their details from a lending company they worked closely with. All of the text recipients had applied for a loan through that lender and had confirmed that they had a suitable guarantor. All had also given their consent for the lending company and other selected partners to use their contact details for marketing purposes.
Sandhurst believed the wording did not imply any pre-approval for a loan and pointed out that the message was phrased conditionally, "... we could approve you for a loan ...". There was no guarantee that an applicant would be approved. Given that all recipients had previously indicated that they might be able to provide a guarantor, Sandhurst believed it was reasonable to encourage them to apply on the basis that they ”could” be approved. They also explained that the text "No matter what your circumstances" was used, because the financial circumstances of the applicant might not be relevant, given that a guarantor was required to secure a loan from the lenders they worked with. They said any lenders used, in response to an application as a result of the text message, would have their own criteria to satisfy, both for the applicant and the guarantor, to ensure responsible lending.
Assessment
1. & 2. Upheld
The ASA considered that the wording of the message, "… spends4u could approve you for a loan of up to £1000 today. No matter what your circumstances" implied the advertiser was willing to accept applications from the text recipients, regardless of their financial situation, and that they could be approved for a loan.
We acknowledged that the message was sent to phone numbers provided by those who had already applied for a similar loan, and so might be interested in the marketing message, and also that they had confirmed that they had a suitable guarantor in place. We noted, however, the message did not refer to the requirement of a guarantor and considered that this was material information, which put into context the statement, "No matter what your circumstances". Recipients were unlikely to be aware that they had received the message solely on the basis of guarantor backing.
We also understood that any lenders to who loan applicants were ultimately referred would have their own approval criteria, depending on individual circumstances. The statement "No matter what your circumstances" implied it was possible to be approved for a loan, without regard to an applicant's situation.
The space for a text message marketing communication was limited and we acknowledged that marketers might find difficulty in delivering their message in a succinct way. However, it was important that, when marketing through text or any other means, the message conveyed was responsible and compliant with all aspects of the advertising Code and other regulations. In this example, although we recognised that there had been an element of targeting involved in the process, we concluded that the content of the message implied recipients could be approved regardless of their situation, which was not the case, and trivialised the lending service offered by encouraging applications for a loan, without due regard for their financial circumstances.
The ad breached CAP Code (Edition 12) rules
1.3
1.3
Marketing communications must be prepared with a sense of responsibility to consumers and to society.
(Responsible Advertising),
3.1
3.1
Marketing communications must not materially mislead or be likely to do so.
and
3.3
3.3
Marketing communications must not mislead the consumer by omitting material information. They must not mislead by hiding material information or presenting it in an unclear, unintelligible, ambiguous or untimely manner.
Material information is information that the consumer needs to make informed decisions in relation to a product. Whether the omission or presentation of material information is likely to mislead the consumer depends on the context, the medium and, if the medium of the marketing communication is constrained by time or space, the measures that the marketer takes to make that information available to the consumer by other means.
(Misleading advertising).
Action
The ad must not appear again in its current form. We told Sandhurst Associates Ltd to ensure that all material information was included in future messages and to avoid statements that encouraged loan applications without due regard to an individual's financial situation.
