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Wonga TV ad banned for failing to show interest rate | Wonga TV ad banned for failing to show interest rate |
(about 3 hours later) | |
The Advertising Standards Authority has banned a TV advert by payday lender Wonga, after a complaint by a charity. | The Advertising Standards Authority has banned a TV advert by payday lender Wonga, after a complaint by a charity. |
Citizens Advice argued the advert - in which a man jotted down figures on a napkin before checking on his phone calculator - breached regulations by not revealing the loan's interest rate. | Citizens Advice argued the advert - in which a man jotted down figures on a napkin before checking on his phone calculator - breached regulations by not revealing the loan's interest rate. |
One of Wonga's "pensioner puppets" is seen telling the man: "You appear to be in a financial quandary, young fellow." | One of Wonga's "pensioner puppets" is seen telling the man: "You appear to be in a financial quandary, young fellow." |
The ASA ruled that the advert must not appear again in its current form. | The ASA ruled that the advert must not appear again in its current form. |
Adverts from a handful of other payday lenders were banned by the ASA in July for falling foul of advertising codes. | Adverts from a handful of other payday lenders were banned by the ASA in July for falling foul of advertising codes. |
Wonga, which has faced criticism for its high interest rates and debt collection tactics, has not had any TV advertising since June, when a new chairman joined the firm. | Wonga, which has faced criticism for its high interest rates and debt collection tactics, has not had any TV advertising since June, when a new chairman joined the firm. |
The company said this ruling related to an old advert and there was an ongoing review of its marketing. | |
The company recently announced it was writing off £220m of debts for 330,000 customers after putting in place new affordability checks. | The company recently announced it was writing off £220m of debts for 330,000 customers after putting in place new affordability checks. |
Credit 'incentive' | Credit 'incentive' |
The advert banned by the ASA contained the line: "Yes - you can even pay back early and save money". | The advert banned by the ASA contained the line: "Yes - you can even pay back early and save money". |
It ended by displaying the web address "wonga.com" prominently. | It ended by displaying the web address "wonga.com" prominently. |
The regulator considered this "an incentive to apply for credit", and said that consequently, the representative annual percentage rate, or interest rate, should have been displayed. | The regulator considered this "an incentive to apply for credit", and said that consequently, the representative annual percentage rate, or interest rate, should have been displayed. |
Responding to the ruling, the chief executive of Citizens Advice, Gillian Guy, said: "Adverts must be clear about what taking out a loan means and how much it will cost. | Responding to the ruling, the chief executive of Citizens Advice, Gillian Guy, said: "Adverts must be clear about what taking out a loan means and how much it will cost. |
"The consequences are really serious when payday lending goes wrong. High interest rates and fees can mean that a small loan balloons into a huge debt." | "The consequences are really serious when payday lending goes wrong. High interest rates and fees can mean that a small loan balloons into a huge debt." |
He added that "both the advertising and payday loan industries need to look at why so many adverts are not meeting the grade and change their ways". | He added that "both the advertising and payday loan industries need to look at why so many adverts are not meeting the grade and change their ways". |