Yet another ad for payday loans has been removed from our screens.
Sunny Loans is the latest payday lender to fall foul of the Advertising Standards Authority, with its puppet-based broadcasts pulled for being misleading.
Misrepresentening the APR
The first advert features a female puppet on the phone to Sunny while working in her office. In sheer disbelief at the loan offer, everyone in the office starts dancing to remarkably well-timed background music. It is possibly enough of a distraction to overlook one important thing missing: the representative APR. With no sign of the loan's representative APR, this advert breaches the code.
The second advert focused on Sunny flexi-pay. This is similar to other plans where you can pay back loans on your own schedule. This time the advert voluntarily showed the representative APR.
So what’s the problem? As Sunny implies competition with payday lenders, the ASA said that it needed to do more to highlight the relative risk of taking out the loan, which in this case is a sizeable 1,791% Representative APR.
The ASA ruled that neither advert should be shown again in their current form.
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Other payday advert rulings
[SPOTLIGHT]Sunny is just the latest payday lender to have its adverts pulled by the ASA.
In April, a Wonga advert was removed for implying that 5,853% representative APR on its loans was irrelevant to the repayment period. It also failed to take annual interest rates in to account alongside that APR. 31 people complained about the advert, claiming that it was misleading.
Payday Pig also fell foul for suggesting that taking out a loan is a frivolous matter. Its short-lived TV ad featured two cartoon pigs encouraging viewers to “treat [themselves] and a loved one to a weekend away and a slap-up meal”. The ASA said that it was irresponsible of Payday Pig to encourage people to make this kind of commitment to pay for non-essential things.
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Clean up your act
This substandard marketing hasn't escaped the notice of the regulator. A study by the Financial Conduct Authority (FCA) showed that one in five adverts from consumer credit firms failed to meet the authority’s own promotional expectations of being clear, fair and not misleading.
Some of the firms’ more devious tactics include:
- Targeting people under 18 by sending out branded colouring-in sheets with their informational pamphlets
- Claiming that their product would help to improve credit ratings
- Claiming that their product would help clear the customer’s debt when in reality it is merely replacing it with another.
108 promotions were identified as unsatisfactory by the FCA, across all media outlets.
For more read Lenders rapped for misleading adverts
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