Payday loan firm Wonga has had an advert banned in a damning ruling by the Advertising Standards Authority — and not because those puppets are really annoying. The TV spot featured an exchange between two of the firm’s elderly mascots discussing interest rates:
“Right, we’re going to explain the costs of a Wonga short-term loan”
“Some people think they will pay thousands of per cent of interest”
“They won’t of course – that’s just the way annual rates are calculated. Say you borrowed £150 for 18 days, it would cost you £33.49 … Total cost; it’s totally clear.”
Except it wasn’t clear at all.
Wonga’s voiceover and graphics trumpeted their own measures of interest paid by customers but “irresponsibly encouraged viewers to disregard” the representative APR — a whopping 5,853% — a mandatory measure allowing full costs for different loans to be compared.
The ASA ruled against Wonga on all four aspects of 31 complaints received:
- that the ad confused interest rates
- it claimed a high APR was “irrelevant to a short-term loan”
- it trivialised the decision to take out a short-term loan
- the representative APR was not sufficiently prominent
The ASA can’t levy fines from advertisers — so Wonga get a slap on the wrist and told not to do it again.