Background
Summary of Council decision:
Two issues were investigated, of which one was Upheld and one was Not upheld.
Ad description
A radio ad for Barclaycard, heard on 23 October 2022 on LBC featured a voiceover which said, “Using my Barclaycard Forward credit card to pay for the stuff I need now could help build up my credit score for the day I need something bigger. So buying a set of headphones …” Music was heard in the background. The voiceover continued, “… or weights for my workout … Could help in the future when I want to rent my first flat share.” A party was heard in the background. The voiceover said, “Now that is forward thinking. Check if you are eligible at Barclaycard.co.uk. 33.9% APR representative variable, subject to application, financial circumstances and borrowing history. T&Cs apply. Responsible use of a credit card can help build your credit score when you pay on time.”
Issue
The ASA received three complaints:
1. three complainants, who believed the ad targeted young people and encouraged them to purchase items on credit, was irresponsible; and
2. two complainants, who understood that a good credit score was not essential to rent a property and that the ad exaggerated the impact of retail purchases on a credit score, challenged whether the ad was misleading.
Response
1. Barclays said the ad targeted those who needed their first credit card, specifically younger people and people who had moved to the UK. Those individuals may have a lower credit score due to the lack of evidence of credit usage and it would be difficult for lenders to assess their financial behaviour. Opening a credit card and using it responsibly was helpful to those types of people, who needed to make financial decisions.
They explained the ad did not trivialise taking out a credit card and only encouraged building a credit score responsibly. It was about using credit in the right way and future planning.
They said the ad did not exaggerate the impact of retail purchases and just said that purchases on a credit card “could help me build my credit score” if used responsibly. They said that while the retail purchases in the ad were not material, if done over time and responsibly, they would make a big impact on a consumer’s credit score.
They said that the ad did not state or imply that it was the only way to build a credit score. It was therefore clear that it was only one way to do it and being financially responsible in other ways could also have an impact on their score. They said that the ad also stated, “‘subject to application, financial circumstances and borrowing history”. Therefore, it explained they would conduct affordability and credit checks, only offering to those who could afford it and therefore lending responsibly. Listeners were encouraged to check their eligibility and the ad also stated, “Responsible use of a credit card can help build your credit score when you pay on time”.
They explained that the Forward card interest rate was competitive and there were equivalent cards with other lenders with higher interest rates. They also confirmed that they encouraged responsible use of the card by offering interest rate reductions in years one and two of having the card. That meant customers could reduce the interest by three per cent in year one and two per cent in year two. That was done to assist customers manage their finances as responsibly as possible.
Radiocentre said because using credit and making regular payments could help improve a credit rating, the claim “could help build up my credit score” in the ad was a soft and valid claim.
2. Barclays said that the ad was intended to show that you could improve your credit score by using a credit card responsibly, purchasing goods and paying it off in time. The ad was therefore saying that using a card in that way could help build a credit score to enable bigger purchases, such as the example in the ad - a flat share - and therefore was promoting financial planning. They explained that many third parties and credit reference agencies recommend using a credit card in that way to build a credit score.
They said that a good credit score was important for letting agents when letting a property. They said landlords did use many factors when considering a credit score, salary could be one of them, but it was down to the individual landlord to decide which factors to pick.
They explained that the Principles of Reciprocity (PoR), which govern the use of credit data throughout the industry, did allow rental data providers to view detailed credit data. That applied to social housing providers and they must also share with credit reference agencies, for example, details of a user’s rental account performance. Credit performance data providers could then access the social housing rental data when making credit and affordability decisions. In addition, social housing landlords could also access credit performance data to assess affordability for tenants.
They explained PoR allowed private landlords and letting agents, with more than 100 properties, to use credit data when making credit and affordability decisions. However, they could not confirm that every landlord would use credit reference agency checks, or if they did, that the credit data they could access was suitably detailed and therefore after listening to customer feedback, they were willing to withdraw the ad.
Assessment
1. Not upheld
The ASA acknowledged Barclays’ willingness to withdraw the ad.
The ad stated that purchasing items on a credit card could help build a credit score, which in turn could assist in the future, for instance if someone wanted to rent their first flat. Because the ad specifically discussed renting a first flat, while it was relevant to people new to the UK, we understood it was primarily aimed at younger people. That interpretation was supported by the person narrating the ad who had a youthful voice, the use of the phrase “smashed it” and the purchases highlighted in the ad such as headphones and weights that had particular popularity with a younger demographic. Therefore, we considered that listeners would interpret the message of the ad to be that funding your interests on a credit card, especially for younger people, ultimately could have future benefits for larger purchases.
We understood that a credit card should be used carefully to avoid incurring high interest payments or a negative impact on a credit score if payments were missed. Therefore, any message promoting purchases on a credit card, even to assist a credit score, needed to be circumspect and considered, especially when aimed at groups who may not have much financial experience. However, we also acknowledged that when used correctly a credit card could have the benefit of assisting a credit score by giving an individual the opportunity to build up a reliable credit history. A good credit score was important in accessing further credit or being accepted for larger purchases.
The ad stated that the credit card was “subject to application, financial circumstances and borrowing history” and therefore, listeners were made aware that the credit card was not for everyone and that any application was subject to stringent financial checks. The ad further stated, “Responsible use of a credit card can help build your credit score when you pay on time”. It therefore made clear that any use of the credit card, should be done sensibly, not thoughtlessly and any positive benefit was dependent on timely payments being made to the card.
Further to that, the ad only suggested two products as examples of items to be purchased and so did not promote excessive or unrestrained spending. While the items highlighted were not essentials, they were also not large or extravagant purchases. The ad stressed that these same products were needed, rather than things bought for no reason, and so we understood that the ad did not promote lavish or uncontrolled spending.
Therefore, considering the limited and moderate purchases highlighted in the ad, the warning about necessary eligibility checks, the exhortation to use the card responsibly and the overall positive message of building a good credit score, we concluded on balance that even though the ad targeted younger people, it was not irresponsible.
On that point we investigated the ad under BCAP Code rule 1.2 1.2 Advertisements must be prepared with a sense of responsibility to the audience and to society. (Compliance), but did not find it in breach.
2. Upheld
We noted Barclays’ comments that the intent of the ad was to demonstrate that the responsible use of a credit card, via moderate and sensible retail purchases, could assist an individual’s credit score, especially for those with no or little credit history. We further acknowledged their understanding that in some circumstances landlords and letting agents could access credit data when performing credit checks, that applied to social housing landlords and private landlords or letting agents with 100 or more properties. Therefore, in those instances a good credit history could assist someone renting a property. However, we noted Barclays’ admission that they were unable to guarantee that every private landlord could undertake credit data checks or credit checks with the level of data that would provide the benefit highlighted in the ad.
We considered that a significant section of the rental market was made up of private landlords with less than 100 properties. Because there was no guarantee that these individuals would carry out or would have access to detailed credit reference checks, we concluded that the ad exaggerated the impact of retail purchases on a person’s credit score, in relation to renting a property, and therefore the ad was misleading.
The ad breached BCAP rules 3.1 3.1 Advertisements must not materially mislead or be likely to do so. (Misleading advertising), 3.9 3.9 Broadcasters must hold documentary evidence to prove claims that the audience is likely to regard as objective and that are capable of objective substantiation. The ASA may regard claims as misleading in the absence of adequate substantiation. (Substantiation) and 3.12 3.12 Advertisements must not mislead by exaggerating the capability or performance of a product or service. (Exaggeration)
Action
The ad must not appear again in the form complained of. We told Barclays to ensure that future ads did not mislead by exaggerating the impact of benefits of credit card ownership.
