ASA rap for Welcome Car Finance

The Advertising Standards Authority
(ASA) has ruled that a TV advert by Welcome Car Finance was
misleading. It was held that Welcome could not verify that its
advertised minimum £1,000 part-exchange offer, together with a £250
“cashback” on offer at the time, were actually received by each
customer in the light of the sale price of the replacement
car. 

Welcome finances HP sales on non-prime terms to buyers of second
hand cars from its own showrooms. The relevant part of the advert
stated: “We’ll take your old car as full deposit, give you a
minimum £1,000 as part exchange and £250 cashback with a finance
deal that’s perfect for you.”
 On-screen text in the advert had quoted a typical APR of 19.9
per cent. The part exchange sum could be used either against the
price of the purchased car, or towards a deposit on the loan
agreement. The cashback could either be paid out to the customer or
used as a discount on the car price and the net loan
advance. 

At the time of the ASA ruling last month the advert subject to
the complaint was no longer running, and Welcome’s cashback offer
had been withdrawn.

Price not advertised

Crucially, the ASA noted that Welcome did not advertise the sale
prices of its cars. A customer who complained to the ASA said they
could not find out the sale price until the paperwork quoting
weekly HP repayments had been drawn up. 

The ASA found that Welcome usually asked customers to sign a
“disclaimer” acknowledging that the part exchange and cashback
benefits had been applied to the sale. In the complainant’s case,
however, this appeared not to have happened. “We noted that the
documentation [the complainant] received did not clarify the sale
price of the vehicle or demonstrate that either a cashback rebate
or part exchange award had been taken into account,” said the ASA
ruling.

Welcome had said it believed that the advertised benefits had
been received by the complainant, but that due to incomplete
documentation this could not be verified. Welcome undertook to
ensure that the complainant received his entitlement. It also
undertook to take steps to avoid similar failures in future,
including appropriate training and monitoring of sales staff and a
review of documentation for greater transparency.

The ASA nevertheless ruled that the advert could not be
broadcast again until Welcome could produce robust evidence to show
that advertised benefits applied. It welcomed the advertiser’s
intention to review its processes. Though the ASA did not uphold
all of several counts of complaint under the TV Advertising Code,
the overall complaint was upheld on the grounds that “the
[advertised] claims remained unsubstantiated and were likely to
mislead.”

Andy Thompson