Facebook Ad Spotter's Guide
With the internet revolution has come an enormous wave of new forms of advertising - and companies that want to lend you money have been as keen as the rest to get in on the action.
If you've been on Facebook recently, you can't miss the adverts for ‘payday loans' and credit cards.
What you may not have realised is that many of these ads are breaking the law! There are strict rules on how credit can be advertised in the UK, including on websites - and a lot of these ads don't measure up.
The biggest bodge-up that most make, is accidentally forgetting to mention the APR ... that couldn't be because their APR is so enormously high, could it? Surely not!
Here's what you find if you follow one of the ads from Payday UK, and then dig around in the backwaters of their website ...
Tempted? Didn't think so!
To save you from reading through the OFT's 130 pages of regulations and examples, we've gone through it ourselves and put together a quick guide to the most commonly breached rules among the internet ads.
We've distilled it down to five easy-to-understand rules, on one page - and a few examples to get you started.
Are you ready? Then read on!
The Rules
RULE 1: Poor credit history
Does the ad include any of the following words or phrases, or words to the same effect?
Poor credit history, CCJs (County Court Judgments), low credit rating, refused credit, ‘can't get credit elsewhere', arrears, default, missed payments.
Yes? Then the ad MUST show a ‘typical APR'. If it doesn't, then it's breaking the rules!
RULE 2: Making comparisions
Does the ad suggest that they can offer credit on better terms than other lenders? For example, using any of the following words or phrases:
Low cost loan, lowest rates, best buy, cheapest loan, won't be beaten, reduce your payments, save money, best loan, fastest loan
Yes? Then the ad MUST show a ‘typical APR'. If it doesn't, then it's breaking the rules!
RULE 3: Offering incentives
Does the ad offer any incentive to apply for credit, or enter into a credit agreement? For example, offering any of the following:
Free MP3 player, free vouchers, cashback, reward points, nothing to pay for a year, cash within 24 hours of application, buy now pay later, low rates until xxx
Yes? Then the ad MUST show a ‘typical APR'. If it doesn't, then it's breaking the rules!
RULE 4: Upfront about APR
If the website or ad has to display a typical APR for any of the reasons above, then they are not allowed to hide it away - it MUST be show:
1. On the main page
2. More prominently than any of the following:
- any incentive to take out credit (see 3)
- any comparison (see 2)
- any reference to poor credit (see 1)
- the amount of credit
- information about payments and charges
- information about the total amount payable
3. In characters at least one and a half times the size of any information above (for electronic or printed ads)
RULE 5: Don't be shy!
All ads and websites for credit products must include the name of the company that is offering credit and that company MUST have a consumer credit licence.
Hall of Shame
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This ad definitely breaks rule number one and possibly rule number three as well. Naughty naughty! |
This ad breaks rule number one. This ad breaks rule number one and rule number three. Tut tut! |
Oh dear! This ad breaks rule number one and rule number five. |
Not another one! This ad breaks rule number five and rule number three. |
See our quick and easy guide on how to report an ad to Facebook.
Offending Websites
Payday UK - www.paydayuk.com
Breaks rule 4 - typical APR is not shown on main page, only on "Our Charges" page.
Payday Advance UK - www.paydayadvanceuk.co.uk
Breaks rules 1, 3 and 4 - similar to previous, but here the typical APR is only available through a pop-up link within the FAQ page.
My Payday Online - www.mypaydayonline.co.uk
Credit broker for payday loans. Breaks rules 1, 3 and 4 - similar to previous, but gives no APR at all!
