The new Consumer Credit (Advertising) regulations will dramatically reduce the ability of financial services mailings to achieve cut-through, a new NOP survey indicates.
The survey, commissioned by financial services agency CCHM:Ping, and published as the 1 November rules came into force, shows 44 per cent of the 1,000 people sampled believe finance is one of the most important areas in their lives, yet 71 per cent said financial direct mail turned them off because of excessive jargon and small print. The finding comes amidst industry fears of needing even more explanatory small print as the new regulations state that specific claims must be supported with more detailed comparisons, charts and explanations.
CCHM:Ping chairman Lucian Camp says it's a case of the cure being worse than the disease. "We've got to stop boring people. This research highlights the insanity of the regulators who insist on making our communications unreadable, over-complicated and unpersuasive."
While Camp said the new rules' requirements to be "clear, fair and reasonable" must be praised, in reality they translate to being "as legally and com-prehensively bullet-proof as to make them lacking all interest and readability."
But Keith Nichol, creative director at Flourish, whose clients include Chelsea Building Society and AXA PPP Healthcare, said these worries are over-blown. "If people think the rules will prevent a strong idea it says more about the extent of your creative in the first place. While we carefully choose what we say, this is not always due to legal restrictions. We ask 'will the inclusion of a rate or a comparison table improve response'?"
Camp is less convinced. While he believes this might still be the case in the credit market, on the investment side, he says: "It is almost impossible to have an idea."
Nichol accepts that marketers could be put off trumpeting specific USPs because of the amount of backing up that has to go with it. But he believes the amount of fine print could go down. "The rules actually try to be less prescriptive than existing Consumer Credit Advertising rules. We've just re-edited a DRTV ad that I did two years ago and now it can have less small print and still be compliant."
THE NEW RULES EXPLAINED
The new Consumer Credit Advertisements Regulations came into force on 1 November and are part of the DTI's reform of the Consumer Credit Act. All those who advertise credit services must comply. The regulations are intended to clarify what information must be included in different types of ads to enable consumers to compare products more easily. For example, all adverts aimed at people who find it hard to obtain credit must show a 'typical APR'. All uses of favourable terms, like 'cheaper loans', must also carry a 'typical APR' and the positioning of APR rates must have greater prominence than any other financial information in the advert. To ensure they really are 'typical', at least 66 per cent of loans granted must be at or below this number.