In January 2013, the Advertising Standards Authority (ASA) ruled against Nottingham-based payday lender Instant Cash Loans Ltd, which trades as The Money Shop. A TV viewer had queried with the ASA that the company’s television advert had failed to quote the representative APR.

Under regulation 6 of the Consumer Credit (Advertisement) Regulations 2010, the APR must be quoted whenever an advert suggests credit could be available to customers who might find it difficult to obtain credit elsewhere. So an advert for a payday lender would need to quote this interest rate – which is usually very high in the case of a payday loan – if it suggested that its clients may be unable to obtain loans from other types of companies, or would find it hard to do so.

The case centered around the interpretation of the phrase “the banks have just got harder and harder”, which was used in the advert by a previous client of the company. Instant Cash Loans argued that this phrase was not an indication that the client had found obtaining credit from the banks difficult. They pointed to the context in which the comment was made, in that the client had previously said: “What I didn’t estimate properly is how hard it is to get paid from corporate clients”, and also highlighted that his words were accompanied by a caption which included “Guy needed money while waiting for a client to pay. £100 stood in the way of Guy getting new business.” Instant Cash Loans argued that the comment about the banks related to how the client believed they had failed to support him when he experienced financial difficulties caused by clients failing to pay on time.

The advert had been approved for broadcast by Clearcast, a company set up by the UK’s main commercial TV stations to advise on advertising practice, but only after they had queried the omission of the APR with Instant Cash Loans. Clearcast accepted the company’s assertion that the APR was not required as the advert did not contain an incentive to apply for credit, and did not contain other information about the cost of the loan.

In reaching its conclusion, the ASA took advice from the Office of Fair Trading (OFT). The OFT believed that the salient phrase could be interpreted as the client saying that he had experienced difficulties in obtaining a loan from a bank, and thus ruled that the APR should have been quoted.

The ASA duly found that the advert breached 14.11 of the Broadcast Committee of Advertising Practice Code, and ordered that it was not to be broadcast again.

This was the second occasion in four months that the company had been censured by the ASA, after a ruling in September 2012 that it failed to display example repayment information sufficiently prominently.