ASA Ruling | Clear Score Technology Ltd t/a ClearScore – 6 May 2020

Issues:

Financial promotions Financial Services/ FinTech/ Banks Retail

Takeaway points:

The financial promotions regime is complex. The ASA is solely responsible for all financially related broadcast advertising complaints e.g. TV and radio. Where the promotion falls within the ASA’s remit the ASA will likely consult with the Financial Conduct Authority (FCA) and make an assessment as to whether the promotion complies with the BCAP Code and also the FCA’s rules.
In particular, finance-sector companies should remember that the FCA has specific rules in its Consumer Credit Sourcebook (CONC) in relation to financial promotions relating to consumer credit. The overarching requirement is to ensure that a communication is clear, fair, and not misleading.

Summary:

ClearScore is a FinTech which provides customers free access to their credit score and report. Rather than charging the consumer to get their credit report, ClearScore makes its money by promoting loans and credit cards that are suited to certain customers’ needs. The TV advert voiceover for the advert in question referenced the free credit scoring and stated, “ClearScore shows you pre-approved offers on credit cards, loans and more …” from trusted lenders. In small text superimposed at the bottom of the advert on-screen, ClearScore noted “T&Cs apply”. A complainant, whose application for a ‘pre-approved’ loan was declined, challenged whether the claim in a TV ad “ClearScore shows you pre-approved offers on credit cards, loans and more …” breached the Code.

Assessment:

The ASA consulted with the FCA. The ASA determined that the average consumer would understand the term “pre-approved” in the advert to mean that they were guaranteed to get any loan or product subsequently shown to them as pre-approved when using ClearScore’s services. As ClearScore had used the term ‘pre-approved’ as a selling point in their financial promotions, they needed to ensure the use of this term was clear, fair and not misleading, in line with the FCA rules.

The ASA noted that the pre-approved offers would in fact be dependent on personal eligibility, the customer providing the correct financial information, and a lender’s own checks. However, ClearScore had not provided information in the advert that such further checks would be made and that they could result in the application being declined. Accordingly, since the claim meant customers who received “pre-approved” offers would be guaranteed to get those offers, when that was not the case, the ASA concluded that the advert breached the BCAP Code rule 14.11.

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