The ad displayed the DivideBuy logo with the text “the smarter way to pay”. Another poster on the hoarding behind it featured the text “dividebuy.co.uk”.

One person complained to the ASA, saying that they believed the ad encouraged consumers to use credit with high penalties for late payments and challenged whether the claim “the smarter way to pay” was irresponsible.

The regulator itself also challenged whether the ad made sufficiently clear that DivideBuy offered a form of credit.

Rematch Credit Ltd t/a DivideBuy told the ASA that all its credit agreements at the time were interest-free and for a maximum term of 12 months. It stated that meant that their credit agreements were exempt from regulation under the Consumer Credit Act 1974 and outside the FCA’s consumer credit regime.

DivideBuy stated that consumers paid no more by spreading the cost, provided the payments were made on time. It believed this could be described as “smarter”, as it was the same payment but over a longer period of time and it believed it would be a smarter payment method than choosing an alternative credit provider.

DivideBuy explained that it didn’t make money from the consumer and the price the consumer paid for the goods was the same as if they had paid in full at the time of purchase.

DivideBuy charges a missed payment processing fee of £30 after 31 days, with a cap of two such charges per credit agreement. It said it website contained FAQs and other information for consumers.

However, the complaint was upheld by the ASA. The regulator considered that the claim “the smarter way to pay” suggested that using the service was a preferable method of payment for expenditures, compared to paying the full amount at once. It said the claim presented the product as a sensible, risk-free method for general spending, including non-essential purchases.

The ASA considered that the ad encouraged consumers to use credit for non-essential purchases, when that may not be suitable for their circumstances, and that the ad was socially irresponsible.

Regarding whether the advert made it clear that it was offering a form of credit, the ASA pointed out that marketing material must state the nature of the contract being offered. It said that DivideBuy operated as a credit agreement service and users were subject to potential penalties if they failed to make payments on time.

The regulator took the view that splitting payments was a less familiar form of credit to consumers than traditional forms such as credit cards. It noted that consumer research by the Financial Conduct Authority and Citizens Advice showed that many consumers didn’t associate BNPL services with credit, and more closely associated them with cardless payment technologies that didn’t involve credit.

The ASA concluded that the ad did not make clear the nature of the product, and failed to set out an offer for a financial product in a way that allowed it to be easily understood by the audience being addressed.

The regulator told Rematch Credit that the advert must not appear again and that future adverts should be socially responsible and make the nature of the product sufficiently clear.