Jan 07, 2014 Simon Williams
For nearly any company, no matter what industry it's in, consumer engagement is often paramount to success. No matter how much the business funnels into marketing campaigns and other elements, if it doesn't get potential clients interested and starting to spend money, its efforts are likely to be a failure.
This is certainly the case with short term lenders. Companies in this sector have to ensure that people in the United Kingdom are aware of all of their financial options - they don't just have to settle for large rate loans from high street banks, they can also go to alternative credit organizations. These businesses also have to sweeten the deal - perhaps advertising their lower rates and penchant to approve even those without perfect consumer credit scores might interest borrowers.
One thing that many companies do to advertise while on the go is to send their patrons text messages on mobile devices. However, short term lenders have to be very careful when doing this, as a recent case taken up by the Advertising Standards Authority (ASA) proved.
Short term lender faces fine after texting
According to Sophos' Naked Security, U.K. short term lender First Financial Ltd. is now facing a £175,000 fine from the ASA after sending millions of texts to consumers. The news provider reported that these messages were friendly in tone, calling the recipient "mate" and explaining that he or she recently landed a loan of £850 thanks to the lender. The text also included a link to the corporate website.
However, one of the main issues is that these consumers were sent texts without asking for them. Plus, the ASA has advised the lender not to do this when it first adopted this tactic back in June. Naked Security explained that the original warning also included instructions not to indicate that people should take out short term loans to boost their social lives.
Like every other company out there, short term lending outfits also have to market their products and services, so waging a war on the sector because of texts might seem extreme. After all, there are plenty of other businesses, like retailers, that use similar tactics without repercussions. Therefore, lenders and borrowers have to strive to ensure lenders get treated like everyone else by the proper authorities.
Other than that, there's not much lenders can do about this situation, other than avoid such texts or contend with the consequences. Professionals might want to ensure they're only messaging individuals who have expressly opted into such updates, as per the law.