Wonga Mobile Adverts
By @edent
· advertising apr asa badvertising loans mobile oft wonga · 7 comments · 500 words · read ~672 times.
I'll preface this by saying that Wonga's lawyers are far better than mine.
Wonga, the payday loan company, has found itself in a bit of hot water recently. They've had an Advertising Standards Authority adjudication against one of their adverts and they have raised the ire of Stella Creasy MP over their sponsorship of the Tube on New Years.
people should be aware of the extortionate rates of interest that they can charge and people should not enter into irrational or unwise debt obligations
Now, I'm not convinced that payday loan companies are bad per se. If you need a few hundred pounds to avoid being thrown out of your home, these companies can provide a service which traditional banks can't - or won't - provide. That said, taking out a loan is something which should not be done lightly - and should only be done with the full facts at your disposal.
That's why I'm confused by Wonga's latest advertising campaign on mobile. Here are three adverts that I've spotted recently. 
None of them display the APR - even though there is sufficient room to do so. I suppose they could argue that they are advertising the Wonga Android App - not a loan. Therefore they don't need to display the APR. I'm not convinced that's a sound argument - more on that in a moment.
Within the marketplace description, there's no mention of the APR. 
Only one of the screenshots mentions the APR. 
I've been taking a look at the CAP guidelines and recent adjudications, and the OFT FAQs on this subject and I'm left a little confused as to whether hiding the APR in this way is allowed.
Is it simply enough to say
"I'm not advertising [banned product] - I'm advertising an app that lets you get it."?
If so, I think the guidelines need to change.
Two Questions
- Are Wonga in breach of the ASA and OFT codes governing advertising for financial products?
- Does this trivialise money lending?
I'm not saying that Wonga are in breach of the rules. I don't even wish to raise a complaint against them. I will be asking the ASA and OFT for clarification on this matter.
As for the app itself, it's reasonably well crafted. While it's great that you can do so much with a phone, I remain a little uneasy about applying for complex financial products while on the bus. But perhaps I'm getting old. I'm sure that next year I'll be applying for a mortgage via a mobile website and not think it anything strange.
Now With Extra Irony
In one of those delightfully serendipitous moments, a Wonga advert popped up as I was reading Stella Creasy's tweets. 
Tony says:
To be honest while I think they should play by the rules and short term lending needs carefull looking APR isn't the way to do it. APR is a really awful measure of short loans especially when you can borrow for a matter of days. It is like talking about the required rate in runs per over in the last few balls of a cricket match.
S P says:
I think that there should be rates shown, but I don't think they should be APR as this is horrendously misleading. Showing a typical payback vs borrow amount would be good. seeing as they only loan for a max of one month, APR rates would just be too OTT and belittle what payday loans are actually there for.
Ads? On Dabr? Eh?
Ah, my personal install of Dabr runs adverts. Quite a lot of people seem to use it, so adverts pay for the hosting costs. Change was made last year - so anyone running a Dabr install can cover costs. Don't think Dave's planning on introducing it for the main site.
Mobile advertising relevancy algorithms have moved on quicker than I thought!
As many of the customers of these sorts of short term loans often tend to be repeat customers, the annual rate is a perfectly valid one for these purposes.
I've spoken to the ASA, who say
So, I've raised a query with Consumer Direct.