Credit union advertising criticised

Only just over 30% of credit unions are fully complying with advertising standards, findings by the Central Bank show.

In its review of how lending institutions are adhering to advertising and promotion requirements, as set out in the consumer credit regulations, the Central Bank said yesterday, of 291 ads studied, approximately 30% didn’t contain all the relevant information required, or display what information they did contain in a clear, concise and prominent way.

Additionally, instances of non-compliance with marketing regulations, were frequent — mostly so in the sample of credit union marketing activity reviewed. The Central Bank found that only one-third of credit union cases met the regulations. This compared with a 99% compliance rate for the mainstream banks and an 88% hit rate for licensed moneylenders.

The Central Bank has written to all the firms reviewed, highlighting its findings; asking for amendments to be made where necessary. It added “further regulatory action” could be considered if the issues aren’t dealt with satisfactorily.

“Consumers must be confident that financial products and services — including loans — are advertised and marketed in a way that is clear, fair and not misleading,” according to Bernard Sheridan, director of consumer protection at the Central Bank. “This is why advertising monitoring plays such an important role in our consumer protection work. The consumer credit regulations have been put in place to protect consumers who borrow money from firms, and all firms are required to have the appropriate arrangements in place to ensure compliance with them.”

In the case of credit union non-compliance, while the sector’s chief representative, the Irish League of Credit Unions (ILCU), noted that each individual union operates as a separate legal entity and is, therefore, individually responsible for adhering to regulatory advertising standards, it said it, itself, is fully-compliant with regulations and issues advertising guidelines to its members on a regular basis.

In total, 14 credit unions formed part of the review. In terms of their non-compliance, the ads were found not to meet the need to specify clearly, concisely and prominently items like borrowing rates, APRs, credit agreement duration and other terms and conditions.