'Misleading' Wonga advert banned

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A television advert for payday loan company Wonga has been banned because it implied that an interest rate of 5,853% was "irrelevant”.

The Advertising Standards Authority (ASA) received 31 complaints about the advert, which features a conversation between two puppets discussing how much it would cost a potential customer to borrow money from the firm.

The two puppets said: "Right, we're going to explain the costs of a Wonga short-term loan.

"Some people think they will pay thousands of per cent of interest. They won't of course - that's just the way annual rates are calculated.”

The ASA upheld the complaints, saying that the ad was confusing and misleading for viewers. It also said it was irresponsible, because it encouraged viewers to disregard the annual percentage rate and thus "trivialized” the decision to take out a short-term loan.

In a statement, the ASA said: "Whilst we acknowledged that viewers taking out and repaying the loan within the stated time period would not repay 5,853% of the loan, we were nevertheless concerned that viewers would be left without a clear understanding of how the information in the on-screen text could be applied to a Wonga loan, given the ad's assertion that the representative APR was not indicative of the cost of the loan."

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A spokesman for Wonga said it was not fair to describe the advert as misleading and that its intention was to clarify the costs of a loan.

From 1 April the Financial Conduct Authority (FCA) took over the running of the consumer credit market and introduced a number of new rules, including forcing lenders to carry out affordability checks on potential customers, in an attempt to stop people falling into further debt.

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According to your article, "A spokesman for Wonga said it was not fair to describe the advert as misleading and that its intention was to clarify the costs of a loan. "
The trivialisation of the true APR was made by Wonga precisely by drawing attention to the short-term interest.  The success of Wonga reflects directly on the inherent stupidity of their customers. And it is largely these same people who will blow their pensions when they retire, instead of investing for a lifetime and guaranteed annuity or other income investment,  When their pension money is spent they will then throw themselves at the mercy of the state for all sorts of handouts.  
Good thinking Mr Osborne?   Are political donations in any way related to the success of Wonga's exploitation of people that need the State to protect them from themselves?  Payday loan companies are the cesspits of commerce   -  and  I'm trying hard to hold myself back!