Back in October, while in the lift on the way to the tube, I spotted an advert from payday lender Smart-Pig, which targets students. After scanning it, as I often do, I noticed there was no APR and disgracefully, no mention of cost whatsoever.
When I went on to its site to check out its charges, I felt smacked in the face that it was hiding a 1,089% APR!
Luckily I’d taken a snap of the advert on my phone, as you can see below, and (with my campaigns team) reported it to the Advertising Standards Authority (ASA) and regulator the Financial Conduct Authority (FCA).
Just look at the ad – it’s disgusting. It is a high-cost credit lender targeting the youngest people able to borrow in our society and deliberately ignoring cost. The ad focuses on ease and competitions.
Today the ASA has revealed in its report on the complaint that it agrees the ad was irresponsible, because it used a prize promotion to win a term’s rent as an incentive to take out a loan. It ruled that the ad must not appear in its current form again.
It has also referred the bigger points to the FCA: the fact it was hiding its APR and that it was using a competition to incentivise borrowing – where it’s extol to borrow more breaches responsible lending codes. Slightly frustratingly, when the FCA takes enforcement action, it tends to do so in private unless it takes formal action.
The owners of Smart-Pig tried to contact me to tell me they’re the responsible face of short-term borrowing for consumers – well no offence folks, but I think hiding 1,000% APR loans is morally reprehensible, and you should skulk in the shadows.
And I’m not alone. Ridiculously, a commercial, higher education conference had the chief exec of this firm on a panel about improving student finance – but I was pleased to hear both the NUS representative and the director of the Office for Fair Access pulled out in disgust. See the NUS vice president’s blog.
Relevant past blogs: