Category: Financial promotion

On 10 March 2021, the Advertising Standards Authority published a ruling banning an advert by DSG Retail Limited t/a Currys, PC World, Currys PC World deciding it had irresponsibly encouraged the use of credit to finance excessive spending on Christmas gifts.

The advert referred to a ‘buy now, pay later’ regulated credit agreement provided by Creation Consumer Finance Limited under which the consumer would pay no interest if the balance was repaid in the first six months but, if the consumer decided to pay over the agreement’s term (which was longer than 6 month), interest would be charged for the full period of the agreement (including the first 6 months). The representative APR was 24.9%.

The ASA considered “the combination of the sequence of those scenes and the voice-over statement, “Give everyone you love a little ‘oooh’ this Christmas. Buy now, pay nothing for six months” would lead viewers to understand that the dissatisfied individuals in the first part of the ad had not used or considered a ‘pay later’ method to buy or search for those items, but that the gifts shown in the second part of the ad had been purchased using the ‘pay later’ credit option with Currys PC World”.

The ASA decided that “the ad’s messaging explicitly connected the use of a form of credit with deferred payment to buying more expensive gifts, and making people’s loved ones happy with their presents at Christmas as a result”. The ASA went on to decide that “[p]articularly  in the context of the global pandemic and the associated financial difficulties for many people, we concluded the ad irresponsibly encouraged the use of credit to finance excessive spending on Christmas gifts, and was in breach” of BCAP Code rule 1.2 (responsible advertising).

The ASA ruled the advert “must not appear again in the form complained about” and adverts in the future must not “irresponsibly encourage excessive spending through the use of credit, particularly in relation to purchasing higher value Christmas gifts with a ‘pay later’ payment method”.

On 23 December 2020, the Advertising Standards Authority published a ruling banning adverts by influencers deciding they had irresponsibly encouraged customers to take credit with Klarna to pay for goods by linking that with lifting or boosting mood.

The ASA decided that “each ad promoted the use of Klarna’s deferred payment services” and the influencers had “linked buying beauty or clothing products … with enhancing their mood during an uncertain and challenging period, when many people were experiencing difficult circumstances and isolation during the lockdown, including financial concerns and mental health problems”.

The ASA also decided that one of the adverts “linked the use of Klarna with boosting one’s mood in lockdown” and “in the context of the challenging circumstances caused by the lockdown at the time, including impacts on people’s financial and mental health, the ads irresponsibly encouraged the use of credit to improve people’s mood”.

The ASA ruled the “ads must not appear again in its current form”. The ASA also told Klarna Bank AB, and the influencers, that “their future advertising must not irresponsibly encourage the use of Klarna’s deferred payment service, particularly by linking it with lifting or boosting mood”.