In a ruling announced today [15 April 2020], the ASA disagreed with Funding Circle that it was not necessary to flag the requirement in the ad, which was broadcast in March 2019. The ad for Funding Circle loans featured a voice-over which stated: ‘Join the thousands of businesses who’ve taken out a Funding Circle loan with rates from 1.9% per year.’ On-screen text stated: ‘Rates from 1.9% per year.’

A complainant, who understood that a personal guarantee was required to take out a loan, challenged whether the ad was misleading for not stating that information.

Funding Circle said they offered loans of various sizes, each with different lending criteria and conditions to be satisfied. They said borrowers were made aware of all material conditions attached to their specific loan request, including where personal guarantees were required, which was only for individuals associated with limited companies.

Funding Circle also pointed out that the ad stated ‘Ts and Cs apply’, and noted that they did not believe it possible to describe all material terms and conditions related to an act of business lending in a 30-second ad. 

The ASA ruled that the ad must not be broadcast again in the form complained of. In the future, ads must include information that was likely to be considered “material” for potential applicants – for example, that a personal guarantee might be required for some loans. 

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