An advert for payday lender Wonga has been banned for failing to disclose the relevant cost of borrowing.
The television ad showed a man anxiously jotting down figures on a napkin before looking at his phone calculator and seeing the amount of £153.79.
An elderly lady than said: "You appear to be in a financial quandary, young fellow. At Wonga you choose exactly how much to borrow and for how long," and then adding: "You can even pay back early and save money."
The Citizens Advice Bureau complained the ad breached regulations by omitting the representative annual percentage rate (RAPR), as it understood that the claim "you can even pay back early and save money" was an incentive likely to trigger the requirement to disclose it.
The Advertising Standards Authority (ASA) ruled that the ad must not appear again in its current form. Last week Wonga announced it had written off £220 million of debt belonging to 330,000 customers after admitting making loans to people who could not afford to repay them.
Wonga's admission that it lent to people who could not afford repayments is a "symptom of a wider problem" in the payday loans industry, the Citizens Advice Bureau has said.
Rachael Badger told ITV News said the CAB had been hearing that many companies were not properly checking whether customers could afford repayments.
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The number of people "rolling over" their payday loans into a second month or more has reduced by three-quarters since tighter of the industry came into effect, an association representing the industry has said.
Many lenders allow customers to renew their borrowing month-on-month if they are unable to afford repayments - usually incurring extra costs.
Russell Hamblin-Boone, Chief Executive of the Consumer Finance Association, said Wonga's announcement of redress for thousands of customers who had fallen into arrears was representative of "the new lending landscape".
Tighter affordability checks from the Financial Conduct Authority had also meant a dramatic fall in the number of payday loans had been granted, he added.
Hamblin-Boone pointed out that a new "cost of credit cap" on the industry would control the prices of the loans, while further measures restricting the industry are due to be announced before the end of the year.
Archbishop of Canterbury Justin Welby has welcomed Wonga's decision to write off the debts of 330,000 customers whose loans would not have been made under new affordability criteria.
He said the move was an effort to put right some of the things that have gone wrong in the past and the finance industry should be "a good servant not a bad master". But the head of the Anglican Church said the major issue was to create a reformed financial system.
"The big issue is to create a financial system that gives access to the poor and hope for the poorest in our lands, to be able to flourish and develop and have proper access to finance, not just for loans but for savings. For lives in which finance is a good servant, not a bad master."
If Wonga had found breaches in its lending process and taken the initiative in putting things right, they would deserve praise.
The truth seems to be different - behind the great "payday payback" is the Financial Conduct Authority, a powerful watchdog.
The FCA has new powers to regulate the payday sector and what we are seeing today is just the start.
Insiders at the Authority tell me - and I think they are correct - that many lenders are likely to simply leave the market between now and January - either because they cannot or will not apply new rules on checking customers ability to repay.
Wonga will contact all its customers by the end of next week to inform them if they will be among the 375,000 to be included in the redress programme announced today.
ITV News Consumer Editor Chris Choi reports:
Wonga to make changes to its affordability criteria and cancel the debts of those affected by inadequate checks
Wonga will be contacting all customers by 10 October to notify them if they will be included in the payback
Pay-day lender Wonga will write off £220 million owed to it, but the company will only feel the loss of £35 million as the rest is interest on the debts of the 330,000 customers.
Wonga has agreed to write off debts of 330,000 customers who are in arrears of more than 30 days. Move follows review of customer base.
New Chairman of Wonga admits it has been lending money to people who could not afford to repay it. Writing off debts of 330,000 customers.
Wonga Chairman, Andy Haste, promises "real and urgent" change. Henceforth will accept "significantly fewer loan applications".
Wonga is writing off £220 million owed to it but final loss to company only £35 million. Tells you something about interest it charged.