Changes to the small print. Do your radio commercials comply ?

The rules in financial advertising are having a bit of a shake up.

The Radio Advertising Clearance Centre (RACC) have forwarded us the following note:

The Consumer Credit (Advertisements) Regulations 2010 (CCAR) replace the 2004 Regulations on 1st February 2011.

Certain credit ads are exempt (e.g. if the ad makes clear that credit is only available for business purposes).

Ads must include the name of the advertiser (the advertiser’s address is exempt for radio ads).

Where the ad includes a rate of interest or any amount relating to the cost of credit (whether a sum of money or a proportion of a specified amount), the ad needs “a representative example”.

A “Representative Example” consists of the following minimum information:
• the words "Representative Example"
• total amount of credit
• an APR, worded thus: “Representative X% APR” (the APR available on 51%+ of deals arising from the advert)
• cash price
• amount of any advanced payments and any other fees (if relevant)
• duration of the agreement
• total amount payable
• amount of each repayment of credit (if relevant)

Please note that…
The phrase/tag/qualification “Representative X% APR” can be used on its own where the ad:
• is for “bad” credit risks (e.g. “can’t get credit?”)
• contains a ‘comparative indication’ (e.g.“low cost loans”, “our lowest rates”, “save money”, “low monthly payments”)
• includes an ‘incentive’ to take out credit (e.g. “nothing to pay for a year”, “get cash fast”, “2% off our usual rates”, “low deposit”)

Please don't curse the RACC for this. These aren't their rules. They are simply here to ensure the new law is adhered to in radio advertising.

The small print in financial advertising is at the best of times, pretty confusing. But this new rule in my opinion will not benefit the listener in any shape or form. Come on Law Makers, are you really in the belief the audience understands what 'Representative APR' actually means ? And if they do, do they actually care ?

I think cramming T's & C's in a radio ad doesn't do anyone any favours. It's a well-known fact the human brain can't absorb large amounts of information in one go. Therefore a radio advert with a monotonic voiceover rattling off technical prattle that only has meaning to those in the financial sector doesn't really give the consumer any protection at all.

I am completely up for protecting the consumer. So how about just saying 'conditions apply' ? It tells the listener they won't be getting something for nothing and that there is more to the offer than meets the eye.

Job done in a clear, understandable and consise manner. But let's face it. Many of those who enforce the laws don't actually think like us mere mortals. So the chances of things changing for the better are unlikely !

For advice on how Airforce can make the small print in your radio advert legal, yet as unobtrusive as possible, get in touch here.

John Calvert