Advertising consumer credit

Dec 11th '20

The Committee of Advertising Practice (CAP) Code provides general guidance on advertisements for financial products and services but recognises that financial advertising is subject to numerous statutes and regulations. The Background gives a brief summary of relevant legislation and the rest of the section mirrors, to some extent, the requirements set out in those regulations.


In brief, the Code generally covers financial marketing communications that are not regulated by the Financial Conduct Authority (FCA). Technical aspects of non-broadcast ads for products by FCA-regulated businesses (for example, those by banks, building societies, insurance companies, stockbrokers or mortgage companies) are likely to be outside the Advertising Standards Authority’s (ASA) remit.


Most consumer credit, hire and brokerage ads are regulated by the Consumer Credit Act 1974 and the Consumer Credit (Advertisements) Regulations 2010, and in April 2014 the FCA assumed responsibility for consumer credit regulationHowever “non-technical” aspects of consumer credit marcoms (for example, offence, social responsibility, superiority claims, fear and distress and competitor denigration) are likely to fall within the remit of the CAP Code.


Advertisers should be particularly careful to ensure that marketing for high interest, short terms loans is socially responsible. In 2012 the ASA upheld a complaint about a website that featured images of a woman with shopping bags. It considered the images suggested the woman spent borrowed money to go on a shopping trip to make non-essential purchases, and was therefore likely to be seen as encouraging frivolous spending (Sunny Marketing Ltd, 19 December 2012). Similarly, in 2013 the ASA ruled that a text stating “Hi Mate I’m still out in town, just got £1000 in my account from these guys” was irresponsible because it suggested a loan should be used to fund a social life (First Finance (UK) Ltd 19 June 2013). See Short term and payday loans for further information.


CAP is unable to give advice on the law. We recommend marketers seek professional advice if they are unsure how their business might be affected. Copies of the regulations can be found here and here.


See Financial Products and ServicesInsurance and Motoring: Finance and Leasing


Source: CAP


Note: This advice is given by the CAP Executive about non-broadcast advertising. It does not constitute legal advice. It does not bind CAP, CAP advisory panels or the ASA. CAP’s AdviceOnline entries provide guidance on interpreting the UK Code of Non-broadcast Advertising and Direct & Promotional Marketing.


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