Logbook lender Loans 2 Go Ltd has been banned from showing again two of its recent television adverts, after the Advertising Standards Authority (ASA) found issues with the tone of the adverts and with the way interest rate information was displayed.
The adverts both featured a man in traditional Austrian costume, including lederhosen and a feathered cap. He played an accordion and sang a jingle about the Manchester–based lender’s services to the tune of ‘For he’s a jolly good fellow’. Three dancing women, also dressed in Austrian costume, accompanied him, and in both adverts, the man hands a vehicle driver a wad of £20 notes. In one of the adverts, the participants were seen fooling around by smearing each other with ice cream.
Following complaints from viewers, the ASA ruled that the adverts trivialised the serious business of taking out a loan, and also that the Annual Percentage Rate was not displayed sufficiently prominently. On-screen text towards the end of the advert made reference to ‘Same Day Logbook Loans’, while the representative APR of 356.3% was in smaller sized text.
On the first issue, the ASA said in its judgement: “We considered that the overall atmosphere of both ads was jolly, light-hearted and humorous, in contrast to the serious nature of the business of taking out a loan,” and later added: “Due to the celebratory atmosphere of the ads and the lack of emphasis on the potential consequences of taking out a loan, we felt the ads trivialised and presented a casual attitude to taking out a loan. For those reasons, we concluded they breached the Code.”
The latter issue was judged to represent a breach of regulation 6(2) of the Consumer Credit (Advertisement) Regulations 2010, which requires that the representative APR is stated, and is given greater prominence, whenever the advert provides any sort of incentive to take out the loan. It was judged that the reference to providing loans on the same day amounted to an incentive because it was suggesting that the company may be able to provide loans quicker than some of its competitors.
This is just the latest in a series of recent rulings regarding advertisements by short-term lenders. Other reasons why the authorities have found fault with lenders’ advertising methods include: sending unsolicited marketing texts, suggesting loans can be used to supplement regular expenditure and suggesting loans can be used to fund a social life. There have also been several examples of lenders’ adverts displaying the same issues as Loans 2 Go’s, i.e. failing to highlight the seriousness of taking out a loan, and failing to display interest rate information correctly.
Now may therefore be a good time for lenders to undertake a comprehensive audit of their marketing material to ensure it complies with regulatory obligations.