Credit provider Provident, noted for its staunch support from star manager Neil Woodford, has been told not to publish a Christmas advert again over fears it put “emotional pressure” on consumers to take out short-term loans.
The company, which offers online loans, credit cards and vehicle finance, made up around 5 per cent of both Woodford’s Income Focus and Equity Income funds as at the end of November.
Just before Christmas, Provident sent a direct mailing to customers advertising short-term cash loans of between £100 and £1000.
The page featured photos of a small child smiling, wearing a Christmas cracker hat with Christmas lights in the background, two girls laughing as they hung tinsel around an older man, and two people in winter coats hugging on a railway station platform.
The text read: “It wouldn’t be Christmas without…The look on her face…Decorating grandad…Visiting loved ones”.
It continued: “Christmas can be an expensive time of year, so it’s good to know, if you need a loan, we could be here to help.”
A complaint was lodged on the basis that the mailing could be seen as suggesting consumers, particularly vulnerable ones, would be letting down their families at Christmas without a short-term loan.
Provident argued that since the ad was aimed at home credit product customers, they would only issue credit following face-to-face meetings where they could check affordability and suitability, so they could not get credit “thoughtlessly”, and that the images related to the sentiment of Christmas rather than frivolous purchases.
However, the Advertising Standards Agency upheld the complaint, ruling that it must not appear again and that, in future, the company should take care about putting “emotional pressure” on customers or sending irreponsible messages.
The ruling reads: “The ASA acknowledged that the text…was worded cautiously and that the images used in the ad did not show expensive presents or other purchases in any obvious way.
“However, we considered the photographs of a small child smiling and wearing a Christmas cracker hat above the text ‘The look on her face’; the two girls laughing as they hung tinsel around their grandfather and people in winter coats hugging on a railway station platform, preceded by the text ‘It wouldn’t be Christmas without’ were likely to play on consumers’ emotions by evoking aspects of how many people celebrated Christmas, and would pull particularly hard if people were already struggling and worrying about the cost of Christmas.
“We noted the procedures Provident had in place for approving loans, which they felt ensured that credit could not be taken out quickly or thoughtlessly.
“However, we considered the personalised format of the ad, using the recipient’s own first name; the sympathetic tone of the text and the sentimental nature of the photographs together were likely to put emotional pressure on consumers to the effect that, if they needed to, it was acceptable to go further than they would otherwise have been able to afford by taking out a loan and that, if they did not, they would be letting their family down. We therefore concluded that the ad did target vulnerable consumers and was irresponsible.”