Encourage Consumer Responsibility Best Practice and Guidelines
Best Practice:
4. Encourage consumer responsibility. A member will implement procedures to inform consumers of the intended use of the payday advance service. These procedures will include the placement of a “Customer Notice” on all marketing materials, including all television, print, radio and on-line advertising, direct mail and in-store promotional materials.
Customer Notice: Payday advances should be used for short-term financial needs only, not as a long-term financial solution. Customers with credit difficulties should seek credit counseling.
Guidelines:
1. Applicable Communications:
The Customer Notice should appear on every “public communication” for which a member makes a disbursement marketing payday advances. This includes:
- any radio or TV broadcast, cable or satellite communication, or newspaper or magazine communication;
- a “mass mailing” (mailing sent by mail or fax of more than 500 pieces of mail of an identical or substantially similar nature within any thirty-day period);
- unsolicited email of more than 500 substantially similar communications; and
- CFSA members’ websites if available to the general public.
Customer Notices do not have to appear on such items as bumper stickers, buttons, pins, pens, or other similar small items upon which the disclaimer cannot be legibly printed.
Similarly, a Customer Notice does not have to appear on:
- Communications on which the inclusion of the Customer Notice would be impractical, such as skywriting or wearing apparel; and
- Receipts and other items of minimal value that are used for administrative purposes and contain no advertised message.
2. General Requirements:
The Customer Notice must be “clear and conspicuous,” giving the reader adequate notice. This means that it cannot be in hard-to-read type, easily overlooked, difficult to hear, or placed where the reader/viewer will not see it.
Members of the CFSA may choose to replace the term “payday advance” with “short term credit” or “payday loan” in the Customer Notice text on their own materials, when such language distinctions will be more familiar to customers in a particular market.
3. Specific Requirements:
Printed Communications: There are two specific requirements for Customer Notices appearing on printed communications:
- The Customer Notice must be of sufficient type size to be “clearly readable.”
- It must be printed in a color that reasonably contrasts with the background color of the communication. For example, a Customer Notice would satisfy the color contrast requirement if it is printed in black text on a white background. Additionally, if the degree of color contrast between the Customer Notice text and the background is “no less than the color contrast between the background and the largest text used in the communication,” the Customer Notice meets the requirement.
Generally, where a mailing includes several pieces or inserts, the Customer Notice need only appear on one of the pieces. If, however, each piece would require a Customer Notice if distributed separately, each such piece must include a Customer Notice. If an ad has only a front face, such as a billboard, the Customer Notice must appear on the front of the ad.
- Industry Websites: Each CFSA member company must include a Customer Notice meeting the above requirements for “printed communications” on its Internet website. The customer notice must appear at the end of the home page of the site and contain the applicable statement listed above. It should be a) contained in a printed box; b) in a type size large enough to be “clearly readable”; and c) printed in a color that reasonably contrasts with the background color of the home page.
- Email: Email communications of more than 500 substantially similar communications must contain the applicable Customer Notice, but the Customer Notice need not conform to the requirements applicable to “printed communications” listed above. Specifically, due to the practical difficulties of creating a printed box around a Customer Notice on an email, a Customer Notice on an email need not conform with the Customer Notice requirements applicable to printed communications listed above.
- Radio Communications: In addition to satisfying the General Requirements listed above, each radio communication must include the following Customer Notice as a clearly spoken audio statement: “Always use payday advances responsibly.”
- Television Communications: In addition to satisfying the General Requirements listed above, each communication broadcast over television or through any broadcast, cable, or satellite transmission must include the full written Customer Notice as follows:
Customer Notice: Payday advances should be used for short-term financial needs only, not as a long-term financial solution. Customers with credit difficulties should seek credit counseling.
The Customer Notice in “clearly readable” writing must appear during the TV ad and must:
- appear in letters equal to or greater than four percent of the vertical picture height OR 21 scan lines;
- be visible for a period of at least four seconds; and
- be printed in a color that reasonably contrasts with the background color of the communication. The same “safe harbors” apply to the color contrast here as with the Customer Notice applicable to printed communications, above.
In addition, the audio statement, “Always use payday advances responsibly” must be spoken during the course of the ad.
