Facebook loan ads slammed by debt charity

14 May 2008

A new report has heavily criticised the advertising standards of lenders who promote their products on social networking sites.

The study, which was conducted by debt charity Credit Action, found that several of the companies, including providers of tenant loans, were failing to clearly display important information about the loan on their ads on sites such as Facebook and mySpace.

Many were failing to disclose the annual rate of interest charged, which is a legal requirement when the product also includes payment-free periods and the offer of free gifts.

It is also required by law when the provider claims that the loan offers a cheaper rate than those from rival companies.

A spokesman for the charity said: "Social networking sites, Facebook in particular, have become hugely popular in recent times, and not just with users.

"Lots of credit companies, especially payday and logbook loans companies are using the medium to advertise their products. It is such a popular method because they can target young people with whom the site is so popular."

Credit Action has urged the Office of Fair Trading to take action to clamp down on the loan providers.