Clampdown on finance adverts
OFT tells Reg Vardy to change its advertising
Adverts' APR interest rate figures weren't clear
APR provides backbone for comparing credit
Major UK dealer group Reg Vardy is to change its finance advertising following discussions with the Office of Fair Trading.
The OFT said adverts that appeared in Scotland and the north of England breached regulations designed to give consumers a truthful and transparent picture of finance deals.
A variety of advertisements from Reg Vardy were considered to breach the consumer credit regulations covering the annual percentage rates (APR) figures used for loans. They breached them in a number of ways, including:
Giving more than one typical APR in an advert and not denoting the typical APR correctly;
Failing to state the correct typical APR;
Failing to state the typical APR with sufficient prominence;
Failing to give the typical APR when required - in particular, indicating that credit is available to customers who might otherwise consider their access restricted. For instance, this could be using statements such as 'Can't Get Credit?';
Not giving the highest APR at which loans were available when a range of APRs were included in the advert;
Not including all items of financial information relevant to the credit offered;
Failing to give the name of the advertiser.
The APR is the true and total cost of a loan, and is the most effective way to compare finance. The APR covers the total amount of money you will pay back, including interest and charges, and must be quoted prominently and clearly in advertisements.
Ignore flat-rate interest figures, because they can give a highly misleading idea of how expensive credit is.
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