Advertising is all about trust. A successful advert doesn’t just make a product appeal to an audience; it also builds credibility and creates a genuine connection with consumers, all whilst complying with regulatory standards. Nowhere, perhaps, is this more important than in the financial sector, where transparent and accurate advertising is essential. You’re promoting loans, savings accounts, insurance… things that have a real impact on peoples’ lives. This is an industry where misleading advertisements can damage a brand’s reputation and lead to significant legal and financial repercussions.
THE RULING
Some recent updates from the ASA (the Advertising Standards Authority) brought home the importance of compliance more than ever - and as specialists in ethical finance marketing, we felt it was important to address the news ourselves.
When working with the ethical banking sector marketers tend to use current topics and events to ensure their campaigns stay relevant. So, as December rolls around, we tend to see an emergence of adverts for Christmas loans - it’s an expensive time of year, and “start saving for Christmas!” is a relatable, on-theme call to action.
A problem arose, however, when the ASA questioned two 2023 Christmas adverts, saying they encouraged customers to spend more than they should by implying that a loan would take any stress out of the festive period. The combination of claims like “With a hassle-free Christmas Loan, you can take the stress out of Christmas” and images of people relaxing over hot drinks and fireplaces “made light of the decision to take on a debt” and endorsed Christmas overspending.
A similar response was made when a second advert was ruled to be an endorsement of Christmas extravagance with its use of headlines including “make this Christmas unforgettable”, and “celebrate the festive season with joy and financial ease”. In short, both credit unions were penalised for putting out messages that could be interpreted in a damaging way - whilst the idea that your loan application will be a straightforward, hassle-free process complies with advertising standards, an advert implying that the loan itself removes any stress from a situation does not.
WHAT DOES THIS MEAN?
So, what does this mean going forward? Is it a sign that we have to stop this seasonal approach to loan advertisements?
Not exactly. What it does mean, though, is that we - both marketers and anyone working in the financial sector itself - must be extremely aware of the messaging we use when it comes to promoting our financial products and services.
Not just in December, but throughout the year. ASA may only have penalised Christmas adverts, but if an advert for a stress-free Christmas has been interpreted in this way, then the same interpretation could easily be made of one that encourages its audience to take out a loan for a summer holiday, or for the back-to-school shop.
The Consumer Duty rules from the FCA mean that it’s essential for credit unions to act in their members’ best interests. No advert should cause untowards harm through its messages. This has always been a cornerstone of the community banking sector, but the recent ruling proves why credit unions must make it crystal clear that their mission lies in empowering members to achieve their financial goals and independence.
HOW DO WE REMAIN COMPLIANT?
Based on the ASA’s ruling as well as previous guidance on GDPR, Consumer Duty and more, here is the compliance checklist we follow when putting together ad campaigns for our clients:
All promotions must be three things: clear, fair and not misleading.
Any information provided must be accurate, sufficient and easily understood - not attempting to hide any information.
Risks are presented clearly, including terms of the product or service that is being promoted.
Eligibility assessments and checks must be identified and presented.
Comparisons to products must be made in a fair and balanced manner, and include references from where your information came from.
Avoid using jargon deliberately inserted to confuse or obfuscate.
Only promote services to members when they have expressly given permission to receive such communications (under GDPR).
Include your organisation’s FCA number on any promotional materials
Do not encourage excessive or extravagant behaviour as a result of being provided with a product or service (such as a loan), and similarly never use language that makes light of the decision to apply for credit.
If any information in this piece or any of the points above seem unclear, always refer to official guidance from the FCA.
Feel free to contact our team at info@zyncdigital.com with any questions.
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