Ad banned for offering to pay rent as prize for borrowing

An advert for a student loan company has been banned for offering the chance to win a term's rent in return for borrowing money.

The poster and beer mat for Smart-Pig.com said: "Every customer is entered into our competition to win a term's rent up to £3,500 ... Borrow up to £350 until your next Student Loan."

MoneySavingExpert.com and four members of the public complained that the use of a prize promotion to win a term's rent as an incentive to take out a loan was irresponsible.

They also complained that the advert irresponsibly targeted students who were likely to be managing debt already.

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FCL Consumer Finance, trading as Smart-Pig.com, said it gave a term's rent to a randomly selected UK student every term who liked their Facebook page to promote the brand, and there was no requirement to be a Smart-Pig customer.

It said its customers were educated young adults and mature students from a diversity of backgrounds and universities, and unlikely to be managing immediate debt because government-approved student loans were not deducted from their income until they were earning a certain amount annually.

The Advertising Standards Authority said the advert's text saying that 'Every customer is entered into our competition to win a term's rent up to £3,500' suggested that only those who had taken out a short-term loan would be considered for the prize.

It said: "We considered offering a prize promotion to win a term's rent as part of a loan application could encourage those who might not have otherwise been considering taking out a short-term high interest loan to do so.

"Because of that, we concluded the ad was irresponsible."

MoneySavingExpert.com founder and editor Martin Lewis said: "I was fuming when I spotted this ad on the Tube. This high-cost credit lender is targeting the youngest people able to borrow in our society and deliberately ignoring cost - just focusing on ease and competitions.

"I'm very pleased the ASA has upheld that Smart-Pig is breaching its code and in the main agreeing the ad was irresponsible in using a prize draw to obfuscate its dangers.

"However, the biggest point is the advert didn't include its 1,089% APR rate - and for that we now await a ruling from the Financial Conduct Authority. We cannot allow these loans of limited use and last resort to present themselves as a mainstream option."

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