Advertising of credit
There is a series of regulatory requirements that govern the advertising of financial services and credit. The Central Bank of Ireland monitors such advertising by the firms that it regulates and ensures that their advertisements comply with these requirements.
The credit provider (the lender) is responsible for ensuring that its advertisements comply with these rules. Lenders must not publish, display, or submit to others (for example, a publisher) any advertisement that breaks the rules.
To check whether a financial services firm is regulated by the Central Bank, you can check the register at registers.centralbank.ie.
Requirements for the advertising of credit
In general, advertising of financial services and credit must be clear, fair, accurate and not misleading. Headline claims and offers in advertising materials must be balanced with information on areas such as risks, fees and charges so that consumers can make fully informed choices.
The main requirements are in the following legislation and codes:
- Consumer Credit Act 1995 (pdf)
- European Communities (Consumer Credit) Regulations 2000
- European Communities (Markets in Financial Instruments) Regulations 2007
- Consumer Protection Code for Licensed Moneylenders 2009 (pdf)
- European Communities (Consumer Credit Agreements) Regulations 2010
- Consumer Protection Code 2012 (pdf)
Under Section 7 of the European Communities (Consumer Credit Agreements) Regulations 2010, any advertising concerning credit agreements that indicates an interest rate, or any figures relating to the cost of the credit to the consumer, must include standard information. This standard information must specify clearly, concisely and prominently, using a representative example;
The borrowing rate (fixed or variable or both) and details of any charges included in the total cost of the credit to the consumer
- The total amount of credit
- The annual percentage rate of charge (except in the case of an overdraft)
- If applicable, the duration of the credit agreement
- If the credit is in the form of deferred payment for a specific good or service, the cash price and the amount of any advance payment
- If applicable, the total amount that the consumer is required to pay and the amount of the instalments
If the consumer is required to conclude a contract for another service (such as insurance) in order to access the credit agreement as advertised, and if the cost of this service is not known in advance, this requirement must be stated clearly, concisely and prominently as part of the standard information.
In 2014, the Central Bank published its review of the banking, moneylending and credit union sectors’ compliance with these requirements.
Consumer Protection Code 2012
The Central Bank of Ireland‘s Consumer Protection Code 2012 applies to most of the financial services firms that are regulated by the Central Bank. Under the Code and associated addenda, firms must act honestly, fairly and professionally and must not mislead you about the advantages or disadvantages of any product or service. The Code does not apply to hire purchase or consumer hire agreements see ‘Advertising financial accommodation’ below.
The Central Bank has produced a general consumer guide to the Code (pdf) as well as a guidance document (pdf) on its requirements on credit advertising. Advertisements must clearly represent what the advertiser is offering to the consumer. The rules in the Code cover advertising in all formats, including the following:
- TV, radio, print
- Outdoor advertising, such as billboards, window displays, advertising on public transport, at bus stops and rail stations •Online advertising, including banners, pop-ups and other forms
- Video streaming, micro-blogging and comment feeds on social media sites
- Internet discussion sites
- Websites and marketing sites
- Search engine sponsorships
- Promotional materials (such as text messages)
- Competitions and advertorials that promote products or services
When the firms that the Code regulates are advertising financial products and services, they must:
- Make sure that any information they provide to you is clear, accurate, up to date and written in plain English
- Make sure their promotional materials and advertisements are clear, fair and accurate and do not mislead you
- Not hide key information about a product or service in the small print of an advertisement
Advertising financial accommodation
Financial accommodation is the term used to describe a hire purchase agreement, a consumer hire agreement or the provision of a service. Advertisements for these must include:
- The kind of the accommodation - hire purchase or other arrangement
- The cash price of the goodsor service
- The total cost of credit or the hire-purchase price
- Details of the number, amounts and timing of instalments
- Details of any deposit involved in agreement
- The numbers of instalments that need to be paid before you will receive delivery of goods
- Any details concerning another form of credit, which might be used as a comparison in the advertisement
An advertisement for credit cannot be described as being "free from interest" if it concludes that there is an extra maintenance or insurance contract involved.
Consumer hire agreements
There are, in addition to the provisions outlined above, certain requirements that particularly apply to consumer hire or leasing agreements. The fact that ownership does not pass to the consumer in a leasing agreement must be stated in any advertising. The statements "Letting, Hiring or Leasing of the Goods Only" and "The Goods Remain the Property of the Owner" should be included. These statements should be in at least as prominent a position as any sum payable by the hirer and enclosed in a boundary box in a visual advertisement. The amount that is payable by the hirer must be indicated in the advertisement and include all amounts, including taxes.
How to apply
If you feel that any credit advertisement or promotion is unclear, inaccurate or misleading, you can report it to the Advertising Unit in the Central Bank at email@example.com.