Currys PC World has been reprimanded by the UK’s advertising watchdog after it aired an advert which “irresponsibly encouraged the use of credit to finance excessive spending”.
The Advertising Standards Authority (ASA) told the technology giant that its advert, aired over Christmas, must not appear again in its current form and that future adverts must not encourage “excessive spending through the use of credit.”
The advert in question was plugging the retailer’s ‘buy now, pay later’ scheme, allowing shoppers to purchase gifts for Christmas and “pay nothing for six months”.
Its ban marks the latest controversy for BNPL schemes, which have been facing a growing backlash from consumer groups over fears they are leading shoppers into debt amid a growing financial crisis.
While Currys PC World argued the advert did not encourage excessive spending and that viewers would understand it was promoting their finance package, the ASA said it was in breach of BCAP code.
“Particularly in the context of the global pandemic and the associated financial difficulties for many people, we concluded the ad irresponsibly encouraged the use of credit to finance excessive spending on Christmas gifts, and was in breach of the Code.”
Last month, it was reported that BNPL firms Klarna and Laybuy will now face tougher regulations by UK authorities after their usage nearly quadrupled last year.
The Financial Conduct Authority (FCA) will now be given powers to regulate the £2.7 billion BNPL sector following an in-depth four-month investigation, which found one in 10 users were already in debt elsewhere.
Under the FCA’s new regulations, firms will be required to conduct thorough affordability checks before approving a customer.
According to the FCA’s review, shoppers can wrack up hundreds of pounds in debts that other lenders would not be able to see.