Ironmarket Home Loans & Mortgages, based in Stoke-on-Trent, placed an advertisement in The Scottish Sun in January this year offering any purpose re-mortgages and loans worth between £3,000 and £3 million. The advert highlighted special terms for high-risk borrowers including those with a pension income, county court judgment arrears, bankrupts, people who are self-employed and those who have been made bankrupt.
The OFT considered that the advertisement breached the Consumer Credit (Advertisements) Regulations 1989 by:
* failing to advertise their typical APRs of 5% and 8.2% more prominently than the other rates of charge, namely a lower "from" rate of 4.5%
* advertising that a rate of 0-10% may be charged on loans secured on property without indicating what type of fee this is or how it is calculated.
The OFT obtained undertakings from Ironmarket Home Loans & Mortgages under the Enterprise Act that it will no longer use credit advertisements that fail to advertise properly APRs or fail to include required information about any fees payable. Ironmarket immediately took steps to change their advertisements.
Christine Wade, Director of Consumer Regulation and Enforcement at the OFT, said:
‘Consumers need clear and accurate information about the credit terms being offered when considering taking out a loan. Credit adverts which do not indicate the nature and true cost of the loan must be stopped.’
