The Advertising Standards Authority has banned four Instagram adverts issued by one of the largest firms in the ‘buy now pay later’ credit market. The advertisements must not be used again in the same form, and the firm has also been issued with an instruction not to issue any marketing material in future which makes the suggestion that using their credit product could improve the consumer’s mood.

The four advertisements in question all emphasised how buying clothes could ‘lift’ or ‘boost’ your mood during lockdown:

  • [name of firm] helping me get ready for the day ahead in lockdown and lifting my mood!”
  • “Thank you [name of firm] for the simple reminder that getting dressed up can be a total mood booster…”
  • [name of firm] has a huge beauty offering, where you can pay in three across a variety of skincare brands. It means you can splurge on this…”
  • “I’ve been keeping a beauty/skincare routine thanks to [name of firm] in lockdown to help lift my mood! [name of firm] have made it so easy for me to shop and spread my payments across 3 instalments on products I love!”

All of the posts also ended with a hashtag that once again made reference to the name for the firm.

All of these posts were written by Instagram ‘influencers’, rather than by the firm themselves, but all four influencers were being paid by the firm for the promotions, and the ASA has ruled that the firm was responsible for the content of the posts.

Three of the posts were reported by Labour MP Stella Creasy, and the ASA then identified a fourth similar post during the course of its investigation. The advertising watchdog says that the content of the posts could have “irresponsibly encouraged the use of credit”.

BNPL credit is not currently regulated by the Financial Conduct Authority, although this may change in the near future. Former FCA interim chief executive Christopher Woolard is looking at whether BNPL and other forms of unregulated credit should be brought under the scope of FCA regulation, and many consumer groups are calling for BNPL to be regulated.

The market in this area continues to grow rapidly and the coronavirus pandemic might have accelerated this, as more people turn to online shopping and become tempted by offers of BNPL arrangements that pop up on the retail websites they visit.

Ms Creasy has vigorously campaigned for tighter controls on payday lenders in recent years and has now turned her attention to another area of the credit sector that is giving her cause for concern.

Ms Creasy said:

“BNPL companies have rapidly expanded their lending to UK consumers during the pandemic and there’s good reason to be concerned. Many are getting into trouble with these loans that are not regulated, meaning information on the risks they present isn’t clear and decisions about what is affordable aren’t transparent.

“It’s vital that the Government don’t wait until more people are in trouble to act – we waited too long to act with payday loan companies and the result was millions of people in financial difficulty. Ministers must act now to avoid the same fate.”

The company claimed that the references to boosting one’s mood were only ever intended to refer to the purchase of the beauty product on offer, and not to use of its credit services. However, the ASA believed that these posts were inappropriate, especially when one considers the number of times the company’s name appears in the posts.

The company said:

“We thought long and hard about the text of the posts which were subsequently investigated by the ASA. It was a genuine attempt to recognise the mood of many of our consumers at the start of the first lockdown. We recognise that, whilst we had the best of intentions, we missed the mark with the four posts the ASA has looked into.”