Background
Summary of Council decision
Four issues were investigated, three of which were ‘Upheld’ and one Not upheld..
Ad description
A TV ad for payday loans featured the TV personality Kerry Katona who said, "We've all had money troubles at some point, I know I have. You could see your bank and fill in loads of forms, but is there an easier way to get a loan; check out www.cashlady.co.uk, with cash lady it’s simple to apply for up to £300. It's dead fast too. If you're approved, the money goes straight into your account. So if you need extra cash go to www.cashlady.co.uk. Fast cash for fast lives. That's www.cashlady.co.uk." On-screen text stated "T&Cs apply. Cash Lady is a non charging broker. 18+. Approval subject to status. Representative APR 2670%. Representative example: £180 borrowed for 28 days. Interest = £52.50. Total payment = £232.20. Interest rate 378% (variable)".
Issue
1. Twenty-nine complainants challenged whether the ad was irresponsible because it focused on Kerry Katona's financial crisis and encouraged people in similar situations to borrow money.
2. One complainant challenged whether some of the on-screen text was blurred and unclear.
The ASA challenged whether:
3. the APR was sufficiently prominent; and
4. the ad was misleading and irresponsible because it promoted itself as an alternative to banks, whilst offering an APR in excess of 2000%.
Response
1. PDB UK Ltd t/a Cash Lady said that by the very nature of their product, their customers were highly likely to be experiencing "money troubles" as the product was intended to meet short-term, urgent and unexpected financial need or problems. They said Kerry Katona was selected as the face of cashlady.co.uk because she had experienced money troubles in the past and, for that reason, their customers would be able to relate to her. They did not believe this constituted irresponsible advertising. They did not accept that Kerry Katona's "financial crisis" (which they understood to be her bankruptcy) would encourage people in similar situations to borrow money and stated that the ad made no reference to a financial crisis of bankruptcy. They said they had purposely avoided references to this to ensure the ad did not indicate the loans were suitable in cases of severe and long-term financial hardship. They said their loans were limited to £300 and were therefore aimed at those experiencing relatively low-level short-term financial difficulties with a need to bridge a gap between paydays. They said the loans were not intended for people who were severely indebted and who faced long-term financial problems and that they did not offer credit of an amount likely to meet such need. They did not believe the ad implied the loans would be suitable for addressing a significant financial problem such as bankruptcy.
Clearcast disagreed that the ad focused on Kerry Katona's previous financial difficulties or that it encouraged people in similar positions to take out a payday loan. They said the ad merely acknowledged that she had experienced financial difficulties in the past and did not go into any details about what those difficulties were. They said the ad made no judgement on what sort of people should or should not take out such loans and simply said that Cash Lady offered short-term loans. They said it could not be the case that someone who had previously had (and recovered from) financial difficulties should be prohibited from fronting an ad for any form of loan or credit. They said the fact that she herself had experienced problems was merely a point of empathy and experience.
2. They said that on-screen text displayed in the ad met the Clearcast requirements and the BCAP Guidance on "On-screen and subtitling".
Clearcast said that all superimposed text was checked and complied with all of the requirements in terms of size, duration of hold and legibility.
3. They said the requirement for the representative APR was triggered under regulation 6(1)(a)(i) of the Consumer Credit (Regulations) 2010 because the ad indicated that credit was available to persons who might otherwise consider their access to credit restricted. They said they accepted that by indicating credit may be available to those with "money troubles", the requirement for the inclusion of the representative APR was triggered. They said OFT guidance confirmed the APR information was shown more prominently if the consumer's attention was drawn to it more than other items of information. They said in the light of this, the representative APR in the ad was larger than the other wording on screen. They said it was also displayed in the top right-hand of the text in white lettering set against a dark background to give it more prominence, greater legibility and to ensure it was easily identifiable. They also said the APR information was on screen for a longer period of time than was required by guidance.
Clearcast said the APR was twice as big as other credit information in the ad and therefore refuted the challenge that the information was not sufficiently prominent.
4. They said the ad stated "You could see your bank and fill in loads of forms, but is there an easier way to get a loan? Check out www.cashlady.co.uk. With Cash Lady it's simple to apply for up to £300. It's dead fast too". They said the comparison being drawn in the ad related to the length of time it could take to get a loan and that the ad did not in any way imply, indicate or suggest that the cost (or APR) of a Cash Lady loan was comparable to a high street bank loan. They said that payday loans were suitable for consumers with short-term financial needs, where a small amount of money was required urgently. They said the applications and approval processes for a payday loan tended to be quicker than applying for a more traditional loan through a bank. They said if a consumer's circumstance were such that they did not have time to go through a more lengthy process of obtaining a loan, payday loans were a viable alternative. As an example they said, due to work commitments a consumer who needed an emergency loan may not have the time to visit a bank to apply for a loan for a greater amount than they needed which would take longer to reach their bank account than they could afford. They said their loans were, therefore, a more convenient and flexible service delivery which informed their strap line "fast cash for fast lives".
Clearcast said that by referring to standard bank loans and then outlining the features of the relatively low value (up to £300) short-term loans provided, simply pointed out the fact that the short-term loans were quick and easy to apply for. This was a product benefit which Cash Lady were entitled to bring to the viewers’ attention. They said the APR was a tool of comparison that could be very useful when comparing like-for-like credit offerings, but had also been recognised as being less than valuable when comparing totally dissimilar offerings. They said an APR was calculated on the assumption that a loan was designed to be repaid over a far shorter period and that, if short-term payday loans were compared to unauthorised high street overdrafts, which Cash Lady believed to be their nearest competitor, the high street often had even higher APRs.
Assessment
1. Upheld
The ASA considered that viewers would understand from the ad that because of her previous money problems, Kerry Katona (KK) had sufficient personal experience to be able to offer financial advice to those who may have found themselves in financial difficulties. Although the ad did not specifically refer to KK's bankruptcy, we considered that viewers, who were familiar with her and were able to identify with her, would also have been aware of it because it was widely publicised. We therefore considered that some viewers, made vulnerable by financial problems and who may also have had restricted access to credit, may have inferred from the advice given by KK that the Cash Lady loan was advisable for those already having financial difficulties.
Although the ad said loans could be provided for up to £300, it made no reference to the fact that these loans were intended for short-term stop gaps between pay days and were not intended as a more immediate solution for more serious financial problems. This was exacerbated by the claim that "you could see your bank and fill in loads of forms", which would be understood by some viewers to mean that it would be too onerous to contact a high street bank about "money troubles" and that the Cash Lady loan was a more desirable way to help solve a financial problem.
We noted Cash Lady believed the claim "fast cash for fast lives" would be understood to be a reference to busy working lives and therefore the easy and fast access to cash would be a distinct advantage. However, we considered that within the context of the ad, which used KK's celebrity as a theme, some viewers would understand the claim to mean that the payday loan would help to fund a celebrity style lifestyle. We therefore considered that references to KK's financial problems alongside the presentation of the ad more generally had the potential to encourage vulnerable viewers with financial problems and/or restricted credit from seeking to resolve them through the payday loan service and concluded that the ad was therefore irresponsible.
On this point the ad breached BCAP Code rule 1.2 1.2 Advertisements must be prepared with a sense of responsibility to the audience and to society. (Social responsibility).
2. Not upheld
We noted the on-screen text complied with the BCAP guidelines in terms of size of duration of hold and that the information was presented in a white font on a dark background. We also noted the font had clearly defined edges and was not blurred. We therefore concluded the presentation of the on-screen text did not breach the Code.
On this point we investigated the ad under BCAP Code rules 3.1,
3.2
3.2
Advertisements must not mislead consumers 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 consumers need in context to make informed decisions about whether or how to buy a product or service. Whether the omission or presentation of material information is likely to mislead consumers depends on the context, the medium and, if the medium of the advertisement is constrained by time or space, the measures that the advertiser takes to make that information available to consumers by other means.
(Misleading advertising) and
3.11
3.11
Qualifications must be presented clearly.
BCAP has published Guidance on Superimposed Text to help television broadcasters ensure compliance with rule 3.11. The guidance is available at:
http://www.cap.org.uk/~/media/Files/CAP/Help%20notes%20new/BCAP_Advertising_Guidance_Notes_1.ashx
(Qualifications) but did not find it in breach.
3. Upheld
The ad included on-screen text that included "Representative APR 2670%", which was presented in a larger font than the remainder of the on-screen text. We noted Clearcast and PDB UK Ltd believed that the RAPR was therefore sufficiently prominent.
We noted the Consumer Credit (Advertisement) Regulations 2010 stated that, where a credit advertisement included information which indicated that credit was available to those who might otherwise consider their access to credit to be restricted and/or where the ad included an incentive to apply for credit, the ad was also required to contain a representative APR. We consulted the Office of Fair Trading (OFT) for an opinion, and they confirmed that if an ad contained trigger information then it must also contain a representative APR. The OFT also confirmed that the RAPR must be given greater prominence than the trigger information. We noted the RAPR appeared in on-screen text at the same time as other information, including the representative example, and that this text was larger than the other on-screen text it appeared next to. However, the triggers in this instance were in KK's voice-over and we noted she did not refer to the RAPR. We therefore considered that, in the context of the ad as a whole, the APR was not more prominent than the other information which triggered its requirement in the ad. We therefore concluded that the ad breached the Code.
On this point the ad breached BCAP Code rules
3.2
3.2
Advertisements must not mislead consumers 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 consumers need in context to make informed decisions about whether or how to buy a product or service. Whether the omission or presentation of material information is likely to mislead consumers depends on the context, the medium and, if the medium of the advertisement is constrained by time or space, the measures that the advertiser takes to make that information available to consumers by other means.
(Misleading advertising),
3.11
3.11
Qualifications must be presented clearly.
BCAP has published Guidance on Superimposed Text to help television broadcasters ensure compliance with rule 3.11. The guidance is available at:
http://www.cap.org.uk/~/media/Files/CAP/Help%20notes%20new/BCAP_Advertising_Guidance_Notes_1.ashx
(Qualification) and
14.11
14.11
The advertising of unsecured consumer credit or hire services by consumer credit businesses or consumer hire businesses and / or credit brokering businesses or related credit services, such as debt counselling or debt adjusting is acceptable only if the advertiser complies with the financial promotions requirements imposed by FSMA and the FCA's rules set out in Chapter 3 of CONC.. The requirements for financial promotions set out in Chapter 3 of CONC do not apply: (a) where the credit is available only to a company or other body corporate (such as a limited liability partnership); (b) where a financial promotion is solely promoting credit agreements or consumer hire agreements or P2P lending agreements for the purposes of a customer's business; (c) to a financial promotion to the extent that it relates to qualifying credit or (d) it falls within the definition of an excluded communication as set out in the FCA's handbook. If the applicability or interpretation of these rules or provisions is in doubt, advertisers may contact the FCA. The FCA does not check financial promotions for compliance with the CONC rules before they are published. Such advertisements that involve distance marketing must also comply with the Financial Services (Distance Marketing) Regulations 2004 (as amended). Other distance-marketing financial advertisements are covered by the FCA Handbook.
(Financial products, services and investments).
4. Upheld
The ad included the voice-over claim "You could see your bank and fill in loads of forms, but there is an easier way to get a loan; check out www.cashlady.co.uk, with cash lady it's simple to apply for up to £300. It's dead fast too". We considered that the juxtaposition of the reference to filling in forms, against the ease of applying for a loan through Cash Lady implied that it was a more desirable method of obtaining credit. We considered this was exacerbated. Some viewers with restricted credit may have found the product in the ad particularly attractive because of their identification with KK and the references to her own past financial problems. Although we understood the loans were intended for short-term repayment compared to some longer term bank loans, we considered that the presentation of the ad did not make this clear and that it implied that for loans of up to £300, it was more convenient and desirable for those in financial difficulties to obtain credit through Cash Lady than through a high street bank loan. For this reason we concluded that the ad was irresponsible.
On this point the ad breached BCAP Code rule 1.2 1.2 Advertisements must be prepared with a sense of responsibility to the audience and to society. (Social responsibility).
Action
The ad should not appear in its current form. We told Cash Lady to take care with the overall presentation of information of its loans.
