ASA bans advert from Smart-pig.com

Smart-Pig.com created an advert that claimed they would provide up to £3,500 to students and they could use the money for paying their rent. After receiving complaints from the public and some other businesses, the Advertising Standards Authority (ASA) put a stop to this advert from running. The reason this was done as the company was also pushing these students to borrow money from them at an APR of up to 1,089%.

In order to receive the financial assistance from Smart-Pig.com, which is also known as FCL Consumer Finance, the company required people to like their Facebook.com page. At that point they would be enrolled into a promotion in which the customer could be selected to receive up to £3,500 for their rent, or one term worth of housing expense, whichever was greater.

Many complaints were received by the ASA to this approach. The public, as well as various experts, were concerned that by aiming this advert at students, the company was trying to push high priced loans onto these individuals. This was deemed to be very irresponsible by the company as many students are already struggling with paying their debts for their education. Even more concerning was the lack of information on the fact the funds would be issued at 1,089% APR.

The advert seems to imply that only students who applied for a short-term loan would be eligible for the rental assistance. In other words, offering a prize if someone applies for one of their loans could very well encourage a student to use Smartpig.com services. Some people may in fact just sign up for the promotion even though they do not need a short-term loan. Also, requiring someone to borrow money at an excessive APR in order to receive a “prize” is not allowed in the UK. So according to the complaints from the public it was very misleading, and some experts say it could be even considered to be a scam.

In defence of Smartpig.com, they say the customers who use these loans are educated. They claim borrowers know the interest rates being charged and impact of them. The company also states that students would not be impacted as most of the debts they have, such as government loans, do not need to be repaid until they have a job. So any funds given to a student will not overwhelm them.

Next steps for Smart-Pig.com

The company claims they were not pushing any loans onto these students. They state that people did not have to be customers in order to qualify for the £3,500 promotion, however the ASA felt differently. So the adverts were pulled from the Tube.

Now, the Financial Conduct Authority (FCA) is reviewing the lender as well. If it is determined that they were pushing these loans onto customers, and not properly telling borrowers about the 1,089% APR interest rate, then further sanctions may follow. So the final results are still to be determined, but right now the adverts are being pulled so no one else will fall into this trap.

Anyone that has been impacted by this SmartPig.com high priced loans should contact the Financial Conduct Authority. The agency will review the information sent to them.