You are here: Home - Credit Cards & Loans - News -

Laybuy slammed over credit score claims

Written by: Emma Lunn
Buy now pay later (BNPL) lender Laybuy has come under fire from the Advertising Standards Authority (ASA) over claims that carrying out a credit check would not affect a borrower’s credit score.

On 9 February 2021, Laybuy’s website featured a page titled “Your Profile” with text that stated “… tell us a bit about yourself so we can do a secure credit check – it’s quick and doesn’t impact your credit score”.

But a borrower, who believed their credit score had been affected by Laybuy’s credit check, complained to the regulator that the statement was misleading.

Laybuy said that the claim “doesn’t impact your credit score” had appeared by mistake on its website and had been removed before the company was made aware of the complaint by the ASA.

Laybuy said it would ensure its future marketing communications were “subject to improved internal processes and controls”, and that it was “working with credit report providers to reverse the impact of its credit searches on affected consumers”.

The ASA investigated the issue and upheld the complaint. It considered that consumers would interpret the claim “we can do a secure credit check – it’s quick and doesn’t impact your credit score” to mean that before using Laybuy’s service they would be subject to a credit check, and that credit check would not result in any material change to their credit report score.

The complainant provided a copy of their credit report to the ASA which noted that an entry in the report from 9 February 2021 showed that a credit check had been performed by Laybuy. The regulator also noted that explanatory text on the entry stated “Can impact your Experian Credit Score” and that the complainant’s credit score had dropped since the check had been carried out.

The ASA said that while credit scores were complex, Laybuy had not provided evidence that its credit check wouldn’t have any consequences or impact on the complainant’s credit score, or on other consumers’ credit scores.

The regulator concluded that the claim “doesn’t impact your credit score” was misleading and breached the advertising code. It ruled that the ad must not appear again in the form complained about and told Laybuy that future marketing communications should not claim that credit checks would not affect consumers’ credit scores if that was not the case.

The ASA announced it would clampdown on BNPL advertising last year, saying that adverts must make it clear that BNPL borrowing was a form of credit.

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Big flu jab price hikes this winter: Where’s cheapest if you can’t get a free vaccine?

Pharmacies, supermarkets and health retailers are starting to offer flu jabs ahead of the winter season, but t...

Is now the time to fix your energy deal?

Fixed energy tariffs all but disappeared during the energy crisis. But now they are back with an increasing nu...

Everything you need to know about the pension triple lock

Retirees are braced to receive another bumper state pension pay rise next year due to the triple lock mechanis...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

The best student bank accounts in 2023: Cash offers, tastecards and 0% overdrafts

A number of banks are luring in new student customers with cold hard cash this year – while others are compe...

DIY investors: 10 common mistakes to avoid

For those without the help and experience of an adviser, here are 10 common DIY investor mistakes to avoid.

Mortgage down-valuations: Tips to avoid pulling out of a house sale

Down-valuations are on the rise. So, what does it mean for home buyers, and what can you do?

Money Tips of the Week