In Wonga’s now banned advert, a puppet character said: “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.”
But the ASA said: “Though it attempted to clarify the costs associated with a Wonga loan, the ad created confusion as to the rates that would apply. On that basis, we concluded that the ad was misleading.
“Because we considered that the ad misled as to the relevance of the RAPR to a short-term loan and because we considered it irresponsibly encouraged viewers to disregard the RAPR, we concluded that it breached the Code.”
“Whilst we acknowledged that viewers taking out and repaying the loan within the stated time period would not repay 5853% 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 RAPR was not indicative of the cost of the loan.”
The “thousands of per cent of interest” quote was particularly frowned upon, which blurred the distinction between the interest rate and the annual rate.
The ASA added: “The representative example was included in large text in the centre of the screen, and together with the puppet characters formed the only visual detail of the ad.
“We did not agree that it was more prominent than the triggering information, in particular because the on-screen trigger "£33.49" appeared on screen in a dynamic way during the ad and was then highlighted by the actions of a puppet character who had climbed over the representative example to gesticulate towards the trigger with a pointer.
“Because the two were included on screen together and in the same size text, we concluded the representative example was insufficiently prominent in respect of the text "Interest: £27.99."
Wonga acknowledged that it had fallen foul of the regulations and said it wouldn’t happen again.