23 January 2009 Media Release

Car credit ads still failing say Trading Standards 

A survey by 18 of Scotland’s local authorities of car dealers’
ads has found that a worrying level of adverts do not comply 
with the law covering credit advertising. The regulations are
designed to ensure that the information about the type of  
credit facility which they are offering is clear and 
understandable. 

The survey, which was co-ordinated by The Society of Chief 
Officers of Trading Standards in Scotland (SCOTSS), examined
advertisements placed by motor dealers in newspapers and 
found that 77 out of 168 (46%) did not comply with the Regulations.
Breaches ranged from using confusing language to a lack of required
information such as additional fees which added to the cost right 
up to misleading information about the comparisons used. 

The regulations state that a credit advertisement should use 
“plain and intelligible language”, “be easily legible”, and 
specify the name of the advertiser.  Some of the advertisements
surveyed did not meet even these basic criteria. 

If a car advert offering credit includes repayment information,
according to the regulations, it must also state the “typical 
APR” (Annual Percentage Rate of Charge). The Advert must also 
publish the “typical APR” if it specifies another rate, includes
an incentive to buy credit, uses comparative terms, or indicates
that credit is available to the “non-status” market. The 
regulations also say that the company must give the APR which 
applies to most of the agreements a prominent position in the advert.

David Thomson, Chair of SCOTSS, commented: 
“Whilst we congratulate the 91 advertisers that got it right, it is 
a concern that, four years after the regulations came into force, 
there are still so many non-compliant advertisements. 37 of the 168
advertisements failed to include the typical APR, which allows a 
consumer to compare different credit offers. A number of infringements
were considered minor and advice was provided to advertisers and 
publishers, in other cases four advertisements were considered 
misleading and another six are under further investigation.”

“We advise consumers to shop around for credit in the same way that 
they do for a car or other goods and services; the typical APR is a 
useful comparison, but consumers should also look at the total cost 
of the proposed deal, including the part-exchange amount, any payment
protection insurance, and any requirement to pay a large lump sum at 
the end of the agreement. In the current economic circumstances it is 
vitally important that Trading Standards Officers seek to ensure a 
fair trading environment, so that traders who do comply with the 
legal requirements are not at a disadvantage compared with their 
competitors who do not.”


ENDS

For further enquiries, please contact:
Caitlin Stott,  National Co-ordinator SCOTSS, 
Tel: 07852136676, email: coordinator@scotss.org.uk
www.scotss.org.uk


Notes for Editors

1.	SCOTSS is the professional body which represents trading 
standards services in all 32 Scottish local authorities. It 
coordinates fair trading, safety and weights & measures issues 
across the country. As a section of the Trading Standards Institute
its purpose is to promote excellence and enhance the professionalism
of its members in support of informing consumers, encouraging honest
businesses and targeting rogue traders.

2.	The survey was carried out by officers in 18 local authority
Trading Standards services in Scotland over a week in October 2008.
168 advertisements were examined for compliance with the Consumer 
Credit (Advertisements) Regulations 2004.

3.	91 advertisements (54%) were found to comply with the 
regulations, but of these, 36 (21% of the total) did not contain 
information which would trigger further disclosure. 77 advertisements
(46%) were deemed non-compliant in one or more respects.

4.	The most common infringement (37 cases – 22%) was a failure 
to specify the typical APR where it was required. 23 advertisements 
(13.7%) which did contain the typical APR failed to give it the 
required prominence.

5.	Basic advice for consumers considering applying for credit 
can be found on the websites:

http://www.moneymadeclear.fsa.gov.uk/

http://www.consumerdirect.gov.uk/before_you_buy/think_of/borrowing-money