Misleading Ad For High Interest Loans Banned

Wed, 07 Oct 2009

A television advert for a loans provider has been taken off-air because of the company’s failure to mention that customers could be charged a staggering 2,356 per cent in interest.

The ad for QuickQuid, which specialises in offering short-term payday loans, received complaints from 12 viewers, including an MP, who said the advert was misleading and could exploit vulnerable consumers because of the high interest rate on the loans .

The Advertising Standards Authority (ASA) upheld the complaints and said that the ad, which highlighted the short-term lending products offered by the lender, should have included information about a typical APR due to the incentives it featured such as "same-day funding" and "get the money you need today".

It ruled that the commercial was in breach of four advertising rules and must not be shown again in its current form.

"Because of the rate of the interest charged and the potential vulnerability of consumers likely to be attracted by the ad, we concluded that the ad was likely to mislead consumers by omission of information concerning the rate of interest," the ASA said.

In reply, QuickQuid argued that the APR and further information for consumers was available on its website, which viewers had to visit to apply, and new borrowers were restricted to the maximum amount they could borrow.

The company did acknowledge the high APR on some of its loans, but said the rates were related to the short-term nature of its lending.

The ASA ruling follows a commitment by the advertising watchdog earlier this year to examine any adverts that imply debt "can be taken lightly".
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