Credit ads breaking Facebook rules

Credit card companies are breaking advertising rules targeting users using social networking websites like Facebook, a charity has warned.

National charity Credit Action has made a complaint to the Office of Fair Trading (OFT) about adverts which include cheap loans for people with poor credit histories.

It said that many of them appearing on the site are breaking advertising regulations, mainly when they don't mention the annual percentage rate (APR) of the loan.

A spokesman from the charity said: "Social networking sites, Facebook in particular, have become hugely popular in recent times, and not just with users."

"Lots of credit companies, especially payday and logbook loans companies are using the medium to advertise their products," the spokesman added.

"Research by Credit Action has shown that much of this advertising breaks the rules on advertising credit and so we are campaigning to encourage Facebook users to report ads which break the rules."

Credit adverts have to follow strict rules which include showing the APR if it includes mentions of credit history, making comparisons or offering incentives. APR also has to be shown prominently when displayed.

The spokesman said: "It is such a popular method because they can target young people with whom the site is so popular."

"In tough times, seemingly easy options on credit can seem very attractive, even when the long term consequences can be dire."

Credit Action has links to guides on how Facebook ads should be displayed and how to report ads if breaking the rules, and has also created a Facebook group.

Facebook said in a statement: "Facebook is investigating the advertisements in question. Advertisers on Facebook are required to follow the site's guidelines for appropriate advertising and to meet local laws and regulations.

"User reporting is a powerful part of the site, and Facebook encourages its users to report any advertisements that might violate its guidelines so it can investigate them."