Credit firms ‘breaking Facebook ad rules’
- Added:
- May 13, 2008
Credit firms who target young people by advertising on social networking websites such as Facebook are breaking advertising rules, a charity has claimed.
Credit Action, a UK charity which aims to help people avoid debt, has written to the Office of Fair Trading (OFT) to ask for an investigation into the adverts.
It has also set up a Facebook group, called ‘Debt can seriously cramp your style,’ to warn people of the dangers of getting into debt.
A spokesman for the charity said: “It is such a popular method because they can target young people, with whom the site is so popular.”
Our research has shown that much of this advertising breaks the rules on advertising credit and so we are campaigning to encourage Facebook users to report ads which break the rules.
The charity, which is based in London, said some adverts did not give an annual percentage rate (APR) for their loans.
Advertisers are required to include the APR in any advert offering incentives such as a period without payment or a free gift.
The rate must also be displayed if a company suggests it has a better rate of credit than other firms, or if it implies the loans are suitable for those with a poor credit history.
The charity said adverts for payday loans - secured against salary - and logbook loans – secured against a car – were most likely to break the rules.
Malcolm Hurlston, chairman of Credit Action’s board of trustees, said: “Advertising rules are there to make it clear to people from the beginning what they are letting themselves in for.”