The offending advert, which was on television, featured a man and a woman sitting on a sofa in their home. The man said: "My mum gave me this incredible watch," and the woman responded: "It can do so many amazing things.” The man then said: "Help start a business, pay school fees,” and the woman responded “Fly us to the Caribbean.”
But three viewers challenged whether the ad irresponsibly encouraged consumers to take out loans for non-essential purposes such as holidays and leisure activities.
Clearcast, a company best known for clearing ads before UK broadcast, responded to the ASA on borro’s behalf and said: “Although holidays might be seen as a frivolous product on which to spend money, consumers would not be at risk if they were securing a loan against relatively small assets, such as a watch, where as in other forms of lending consumers' property or salary might be at risk.”
They added: “Because of the lesser risk and relatively low APR, they believed the ad was not irresponsible in showing how consumers might spend the money.”
But the ASA felt that taking out a loan was a step that should only be undertaken following careful consideration and that marketers should take care to advertise those products responsibly.
The ASA said: “We considered that the reference to using high interest, short-term credit to fund non-essential purchases such as holidays was likely to be seen as encouraging frivolous spending of that borrowed money.
“We also considered the claims "It's fast, easy, and there's never a credit check" and "Money within 24 hours of valuation" suggested the loan could be obtained quickly and easily, and contributed to an impression that careful thought was not required in advance of taking out a loan that was also suggested could be used to fund non-essential purchases.
“Because we considered the reference to using a loan to fund a holiday encouraged frivolous spending of borrowed money, we concluded that the ad was irresponsible.”
Paul Aitken, CEO and founder of Borro, said: “The advertisement in question ran for eight weeks only, and was removed from the air in March this year following an internal management decision, and prior to any communication with the ASA.
"But, following those conversations, we will ensure Borro’s future marketing communications are fully compliant with the necessary advertising guidelines.”