End for ‘wealth warning’ on ads
Consumer affairs minister Nigel Griffiths has indicated that he intends to jettison “wealth warnings” on radio advertisements and may extend this policy to TV and cinema ads.
Currently, any radio advertising that discusses credit terms must carry a warning about the risks of not keeping up payments. The industry claims this costs it about 14m a year in lost ad revenue.
These warnings can take up as much as 20 seconds of a 30-second ad, according to the Radio Advertising Bureau, the marketing body for the radio industry.
In a Department of Trade & Industry statement Griffiths says: “I see this warning – where advert-isements are incidental to the programme and mainly aim to pro-mote product awareness – as being of limited benefit to consumers.”
The DTI has issued a consultation document called Clarification & Simplification of United Kingdom Consumer Credit Law, and will accept submissions until the end of May. The document will also look at the need for “wealth warnings” in cinema and TV ads.
Observers in the radio industry say that companies such as Toyota, Nationwide and Legal & General would use radio more heavily if these warnings were abolished.
Mike Hope-Milne, group head of sales for Classic FM, the largest commercial radio station in the country, wrote to the DTI last week urging it to do away with the warnings. He says: “They act as a severe disincentive to use the medium and cost this station around 1m a year.”
The Radio Advertising Bureau estimates that radio accounts for about 2.5 per cent of financial advertising, compared with 4.5 per cent of all advertising due to these warnings.
