Consumer Credit (Advertisements) Regulations, which came into force on October 31, 2004, require dealerships and manufacturers to clearly state the financial terms in their adverts.
However, a recent national review by Trading Standards and the Office of Fair Trading found that 60% of adverts in newspapers and 68% of adverts in car magazines fail to comply.
“In the light of the sweep’s findings, the OFT and Trading Standards have provided targeted advice and support to businesses. Further action will be taken where there is evidence of continued non-compliance. Where necessary, court action will be considered,” says an OFT spokesman.
It has also published updated guidance for businesses. Its booklet Credit Advertising provides a summary of the regulations, and can be downloaded from: www.oft.com.
Most breaches concerned the way that APRs are depicted in the adverts. By law, a typical APR must be displayed prominently, together with information on payments and charges.
“The findings are most unsatisfactory for consumers, who must have clear information on the costs of loans,” says OFT chairman Sir John Vickers.