Advertisment
The advertisement was online information regarding the advertisers’ Buy Now Pay Later scheme. The advertiser’s webpage describes the scheme as: –
‘…an interest bearing option that allows you to delay payments on your purchases for up to 6 months. The delayed payment period starts from the date of order (including pre-ordered items and those not ready for immediate dispatch).’
‘Spend €200 or more and delay your payments for 6 months’
Buy Now Pay Later was described as being ‘available to customers who have held a Very credit account for 6 months subject to the account status.’
The website outlined the scheme and its terms and conditions. Towards the bottom of the page, it said ‘Credit provided subject to eligibility and lending criteria.’
Complaint
The complainant considered the advertising material was misleading as when they attempted to avail of the Buy Now Pay Later (BNPL) option using their account they were refused use of the facility.
The complainant alleged that they were told they could not avail of Buy Now Pay Later as the advertisers said it was up to them who can avail of the scheme and that it was a promotional offer. The complainant was surprised by this as they said they had no outstanding debts, overdue payments or other rulings against them. They considered the advertising had been misleading as they said that no reference had been made on the webpage that eligibility for the scheme was at the advertisers’ discretion and that it was a promotion.
Response
The advertisers said that Buy Now Pay Later was only available on certain transactions and that this was explained in in their credit agreement which all customers were required to sign when they opened an account. They quoted the relevant section of their terms:-
‘2. Buy Now Pay Later Transactions
Selected purchases may be available on the following Buy Now Pay Later offers (‘BNPL Transactions’), as published from time to time.
The BNPL Transaction will accrue interest from the purchase date but this interest will not show on the account until the expiry of the BNPL period. Once the BNPL Transaction is charged to your account at the end of the BNPL period, the balance, including accrued interest, will be shown as part of the current balance and will become liable for payment. Amounts owing under a BNPL Transaction, but not yet charged to your account, will be deducted from your credit limit when we calculate the amount you have left to spend. The amount of credit available to you, in relation to your account, will be reduced accordingly. If you pay the cash price of your BNPL Transaction before the expiry of the BNPL period, you will not be required to pay any interest on this transaction.’
The advertisers said that the complainant was incorrect to have asserted that they did not make clear the conditions concerning the availability of Buy Now Pay Later. In evidence of this, the advertiser’s quoted a section of the advertising as having said:-
“Buy Now Pay Later is available to customers who have held a Very credit account for 6 months subject to the account status.”
The advertisers said there were two qualification criteria for Buy Now Pay Later. These were that a customer must have held a credit account for at least six months and that they must meet a minimum threshold with an ‘account status score’ to qualify for Buy Now Pay Later. This account status score was the advertisers internal “credit risk” scoring system based on the individual customer’s stewardship of their account.
The advertisers requested the details of the complainant in order to identify their account. The complainant consented to the release of their personal details to the advertiser and a response was provided with a timeline of events specific to the complainant. The advertisers advised that when the complainant had attempted to make a purchase using Buy Now Pay Later when their account had been inactive for more than 6 months. They advised that in accordance with the company’s internal credit policy rules, this period of inactivity resulted in the complainant’s account being ineligible to avail of BNPL. They advised that the account was reactivated when another order was placed two months later, however, at this time, the account was still ineligible for BNPL as sufficient time had not passed for a new assessment to be conducted. They said that BNPL eligibility was reinstated for the customer at the next statement period after the reactivation order.
The advertisers said that it was clearly communicated in their advertising for the scheme that Buy Now Pay Later was available to customers who have held a Very credit account for 6 months subject to the account status and that this credit was provided subject to eligibility and lending criteria. The deactivation of accounts after six months was part of the advertisers’ internal credit rules, and they confirmed that this was at no point communicated to a customer.
Conclusion
Complaint Not Upheld.
The Complaints Council considered the detail of the complaint and the advertisers’ response.
The Council noted that the complainant objected to the advertising on the grounds that it had not stated that eligibility for the scheme was at the discretion of the advertisers. On examining the advertising, the Council noted that the advertisement had stated that the scheme was open to customers who had held a Very credit account for 6 months subject to the account status and had also stated that credit was provided subject to eligibility and lending criteria. The Council considered that it was standard practice that credit offered to consumers was subject to lending criteria and, therefore, was at the discretion of the lender. In the light of this and as the advertisement had stated that the BNPL scheme was subject to account status and eligibility and lending criteria, the Council did not consider that the advertising was in breach of the Code on the grounds raised.
ACTION REQUIRED:
No further action required.
