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Caution on Credit Advertising Rules on Facebook
Debt advice charity, Credit Action has warned that some credit firms face having the book thrown at them after breaking rules concerning advertising on social networking sites.
The London-based charity has launched a Facebook group to raise awareness of the problem, alongside an official complaint to the Office of Fair Trading.
A Credit Action spokesman said, "Social networking sites, Facebook in particular, have become hugely popular in recent times, and not just with users.
“Lots of credit companies, especially payday and logbook loans companies, are using the medium to advertise their products. It is such a popular method because they can target young people with whom the site is so popular.
"Research by Credit Action has shown that much of this advertising breaks the rules on advertising credit and so we are campaigning to encourage Facebook users to report ads which break the rules."
The Facebook group is called “Debt can seriously cramp your style!” and encourages people to identify ads which break the industry rules and report them.
The spokesman said that many adverts fail to provide information about the annual percentage rate (APR) of interest on their seemingly cheap loans.
APR levels have to be included if an ad offers incentives or free gifts, or if it claims to offers a better rate of credit than rival companies.
It also has to provide the information if the adverts implies that its deals suit borrowers with a poor credit report.
The chairman of Credit Action's board of trustees, Malcolm Hurlston, said that some adverts only include the APR in their frequently asked questions section, although the rules require them to be displayed prominently.
He added, “Advertising rules are there for a reason. They are there to make it clear to people from the beginning what they are letting themselves in for."
Debt Management News posted on 02 June 2008
