1st
Apr 2015
A loan firm’s advertising campaign has been banned by the ASA(Advertising Standards Authority). It was deemed “irresponsible” by using the promotion of giving them the chance to win a full term’s rent, if they took up one of their short term loan packages.
The loan company operates from Warwickshire and declares itself to be FCA regulated, four complaints were submitted to the ASA about their advertising campaign.
The advert appeared on posters telling students that they can get loans of up to £350 which can be paid back when they receive their next student loan payment. It also claimed that anyone that signed up will gain automatic entry into a competition, where they had a chance of winning a full term’s worth of rent to the sum of £3,500.
Four members of the public along with MoneySavingExpert.com, sent in complaints to the ASA stating that they believed the “term rent free” promotion was “irresponsible”, by attempting to persuade students to take out a loan in the hope of winning the prize.
The loan company in its reply to the complaints said that the loan packages would: “.......help students support their studies in a responsible way with policies that aimed to prevent them from getting into financial difficulty”.
The loan company also took said that each and every term they have awarded the equivalent sum of a term’s rent to a “randomly selected UK student who liked their Facebook page,” the firm said that people did not have to be a client to be entered into the draw.
A spokesperson for the loan company also said: “…because of the terms of the competition, and the fact that customers did not have to take out a loan, they did not think the competition was a direct incentive to borrow”. The company felt that targeting a loan promotion for students was not acting recklessly.
The ASA disagreed, although they did understand that customers did not have to take on a loan package to gain entry into the competition from the advert’s copy. “Every customer is entered into our competition to win a term's rent up to £3500" ; however they decided that the wording was ambiguous and could be misconstrued by customers thinking that they had to take out a loan to be entered for the prize.
The ASA stated :“We considered offering a prize promotion to win a term's rent as part of a loan application could encourage those who might not have otherwise been considering taking out a short-term high interest loan to do so,
“The ads must not appear in their current form. We told Smart-Pig.com to ensure prize promotions were not irresponsible in their presentation and that ads did not target students in an irresponsible way,”
The advert was deemed to be “irresponsible” breaching one of the ASA’s regulations (CAP Code 1.3).
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