Clearpay and HSBC warned by the ASA

BNPL firm Clearpay and HSBC both had complaints upheld by the Advertising Standards Authority in its latest round of weekly sanctions.

Complaints regarding Clearpay centred around a trio of Instagram posts, with one utilising characters from the hit TV show Squid Games. 

The regulatory body challenged whether the adverts encouraged consumers to spend more than they could afford. 

In the firm’s response, Clearpay stated: ”Our ‘buy now pay later’ (BNPL) service allowed consumers to receive products immediately and pay for their purchases in four interest-free instalments over a six-week period. The service was free for consumers who paid on time, and helped people to spend responsibly without incurring interest, fees or extended debt.” 

Following the decision, a Clearpay spokesperson stated: “Clearpay has strict guidelines to ensure our advertising does not encourage people to spend beyond their means and our business model is designed to support responsible spending. This includes the fact that a customer is unable to use our service if just one payment is missed and we are transparent about payment due dates. Advertising can be subjective in nature, so we welcome these clarifications from the Advertising Standards Authority’s review into how buy now, pay later products are advertised.”

Clearpay also pointed to the fact that credit agreements were exempt from regulation under the Consumer Credit Act 1974 and were outside the Financial Conduct Authority’s (FCA) consumer credit regime.

The firm added that they did not use phrases that risked consumer confusion or encouraged irresponsible or carefree spending behaviour. 

“The intention of the posts was to highlight behaviours that could potentially lead to irresponsible lending and then deliver a message that aimed to educate followers on the importance of responsible spending.”

Nonetheless, the advert complaints were upheld the ASA, which explained: “By making light of not sticking to a monthly budget, we considered the ad encouraged consumers to use a form of credit with delayed payment to pay for non-essential purchases in situations where they did not have the budget to do so. Because the ad encouraged people to spend more than they could afford, we concluded that it was socially irresponsible.”

Meanwhile, HSBC had a cluster of complaints over adverts involving climate change, in which the first featured an aerial image of waves crashing on a shore with text that stated: “Climate change doesn’t do borders. Neither do rising sea levels. That’s why HSBC is aiming to provide up to $1 trillion in financing and investment globally to help our clients transition to net zero.”

The second poster featured an image of tree growth rings with text that stated “Climate changes doesn’t do borders. So in the UK, we’re helping to plant two million trees which will lock in 1.25 million tonnes of carbon over their lifetime”.

The ASA upheld the complaints, stating that: “We considered consumers would understand the claims ‘HSBC is aiming to provide up to $1 trillion in financing and investment globally to help our clients transition to net zero’ in ad (a), and “we’re helping to plant two million trees which will lock in 1.25 million tonnes of carbon in their lifetime” in ad (b) to mean that HSBC was making, and intended to make, a positive overall environmental contribution as a company. 

“As part of that contribution, we considered consumers would understand that HSBC was committed to ensuring its business and lending model would help support businesses’ transition to models that supported net zero targets. 

“Additionally, they would understand that HSBC were undertaking an environmentally beneficial activity by planting trees which would make a meaningful contribution towards the sequestration of greenhouse gases in the atmosphere. We considered that the use of imagery from the natural world, and in particular ad (a)’s image of waves crashing on a beach, contributed to that impression.”