Payday lender Peachy has been admonished by the Advertising Standards Authority (ASA) for using "emotional pressure" relating to Brexit to encourage people to take out a loan.
The firm sent out an email on 24 January 2019 suggesting that recipients should have a “stockpile ready” as some believe Brexit “could affect the amount of food available,” while offering a £5 promotional discount on a loan.
In the email the firm wrote to readers: “…no one really knows what’s going on with this whole Brexit malarkey…and some say it could affect the amount of food available…We do not want to believe that Brexit will impact the amount of food available but it’s still a good idea to have a little stockpile ready.
“That way you’re always prepared for the worst…Things can pop up even when you think everything is going swimmingly…That’s when you might need a little extra help.”
The email included a call to action button: “IN CASE OF EMERGENCY PRESS HERE.” The ASA has provided Moneywise with the full email below:
The firm was accused by a complainant of irresponsibly encouraging people to take out a payday loan based on fears about Brexit.
Peachy defended itself saying its loans were not designed to resolve financial difficulties but instead for people who needed to cover a temporary cash shortfall.
The ASA says Peachy “believed that the mention of Brexit was made in a light-hearted manner to avoid causing any actual concerns.”
While the ASA acknowledged the advert was made in a light-hearted tone it believed that overall put inappropriate emotional pressure on readers around the high-profile and contentious political topic.
In its ruling the ASA says: “We considered the overall approach used was likely to put emotional pressure on readers to the effect that it was sensible to go further than they would otherwise have been able to afford by taking out a loan and that, if they did not, they risked being unable to feed themselves or their families.”
The ASA ruled that the ad was therefore irresponsible and in breach two separate rules, CAP Code (Edition 12) rules 1.3 (Responsible advertising) and 4.2 (Harm and offence).
The regulator has ordered Peachy not to run the ad again and ensure future advertising does not send irresponsible messages about debt to readers, or applying "emotional pressure" to take out a loan
Moneywise approached Peachy for a response. It denies any attempt to "imtimidate" its customers.
The firm's chief marketing officer Katre Kaarenperk says: "Peachy is committed to promoting our product responsibly and the email campaign was prepared in good faith with not intent [sic] to intimidate our customers in any way.
"Because HCSTC [high-cost-short-term credit] is not suitable as means of resolving financial difficulties, it was our intention to promote our product as primarily of benefit to those in temporary need of money to cover occasional unexpected shortfalls. The email was intended to portray the uncertainties of every-day life, where those who do not have savings for unfortunate events may benefit from our product.
"The reference to Brexit was included in the email only to make the ad topical and to bring a parallel to regular people’s lives, where it may be difficult to be fully prepared for all or unexpected scenarios.
"The mention of Brexit was made in a light-hearted manner to avoid causing any actual concerns and it was not suggested that customers should take out a loan because of uncertainties related to Brexit. The email specifically mentioned that we don’t think Brexit will actually impact the amount of food available and we encouraged customers to only make credit decisions after careful consideration.
"After receiving a complaint from ASA we have reviewed our complaints records, to assess whether the email generated any significant reaction. But we did not receive any feedback from our customers in response to this campaign and it is our understanding that only one complainant has also approached the ASA."