First Choice Finance was considered by the OFT to be in breach of the Consumer Credit (Advertisement) Regulations, due to the nature of its advert in the classified column of the Scottish Daily Mirror on 27 January 2004. The advert was considered to be in breach because it:
* displayed a low rate of interest of 4.25 % and did not state the more representative APR of 6.3 % more prominently
* failed to state that the 6.3 %APR rate was a representative rate
* failed to give the required risk warning a prominent enough position on the advert
* failed to make it clear that the risk warning and typical example were part of the overall advert.
Termpart Ltd, trading as First Choice Finance based in Stockport, has worked with the OFT and their local trading standards service to ensure compliance in the future and has signed undertakings under the Enterprise Act not to repeat these breaches of the regulations.
Christine Wade, Director of Consumer Regulation and Enforcement at the OFT, said:
‘Consumers need to have clear information when they are going to take on a serious financial commitment like a loan. In these circumstances the information provided fell short of the clarity needed to inform consumers of the rates of interest and risks involved in taking out these loans.’
