6 July 2012

Payday loan lenders Wonga have avoided an advertising ban, despite more than 80 complaints that their TV advert had mislead viewers to the true cost of loans.

The complaints focused on Wonga’s omission from their advert of the annual percentage rate (APR) attached to their loans. These rates can be up to 4214%.
 

Wonga defended itself by saying that the advert was simply a way of directing viewers to their website, where individuals are able to gain more accurate information on the total cost of borrowing.

They also argued that using their APR wasn’t an accurate way of comparing their products to those of other companies.

The Advertising Standards Authority dismissed the complaints, stating that the advert only broadly described payday loans and redirected people to the website.

"Although we noted that the APR was high, as was the actual interest rate, we noted that this information was provided clearly on the website, which also included a mechanism that allowed consumers to calculate the true cost of borrowing," a spokes person for the ASA said.