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Home Rulings CAPITEC BANK / CREDIT CARD / STEPHEN HUTCHINSON / 2017-6906F

CAPITEC BANK / CREDIT CARD / STEPHEN HUTCHINSON / 2017-6906F

Mr Hutchinson lodged a consumer complaint against Capitec’s television commercial (TVC) which appeared on DStv channel Supersport 3 on 28 October 2017.

The TVC opens with the on screen claim which states, inter alia, "Capitec people bank better to live better”. It then shows a gentleman using his Capitec credit card to pay the mechanic for fixing his motorbike. Another on-screen claim appears which reads "one card for all your banking. 5.1% interest on a positive balance. R35 monthly fee. Bank better live better.”

COMPLAINT

The Complainant submitted that the TVC is misleading as it states that the total monthly fee is R35 without mentioning that the fee is R35 if there is no balance owing; and R68,40 if there is an active balance owing. The Complainant argued that the TVC constitutes false advertising in a sense that most people using the credit facility will be paying R68,40.

RELEVANT CLAUSE OF THE CODE OF ADVERTISING PRACTICE

In light of the complaint Clause 4.2.1 of Section II (Misleading claims) was taken into consideration.

RESPONSE

The Respondent submitted that Capitec Bank is not a member of the ASA and therefore is not obliged to respond to this complaint.  It, however, responded on the merits by submitting that the complaint is unfounded. The Respondent confirmed that the fee for credit cards is R35 as advertised, and that the R68,40 fee is for the loan and credit facilities. 

ASA DIRECTORATE RULING

The ASA Directorate has considered all the relevant documentation submitted by the parties. 

Jurisdiction

The Respondent indicated that it is not a member of the ASA, nor does it agree to submit to the jurisdiction of the ASA.

In The Advertising Standards Authority v Herbex (Pty) Ltd (902/16) [2017] ZASCA 132 the Supreme Court of Appeal found, inter alia, that:

"1.1       the Advertising Standards Authority of South Africa (the ASA) has no  jurisdiction over any person or entity who is not a member of the ASA and that the ASA may not, in the absence of a submission to its jurisdiction, require non-members to participate in its processes, issue any instruction, order or ruling against the non-member or sanction it;
1.2       the ASA may consider and issue a ruling to its members (which is not binding on non-members) on any advertisement regardless of by whom it is published to determine, on behalf of its members, whether its members should accept any advertisement before it is published or should withdraw any advertisement if it has been published”.

The ASA will therefore proceed to consider this matter for the guidance of its members.

Merits

Clause 4.2.1 of Section II states, "Advertisements should not contain any statement or visual presentation which, directly or by implication, omission, ambiguity, inaccuracy, exaggerated claim or otherwise, is likely to mislead the consumer.”

In essence the Complainant submitted that the claim in the TVC was misleading, as it omitted to inform the consumers that the monthly fee for the Credit Facility is R35 if the Card is without active balance owing; but the monthly fee is R68,40 if there is money owed. The Complainant pointed out that most people using a credit card will have a balance owing.

The Respondent submitted that the Complainant was incorrect, and confirmed that the advert pertained specifically to credit card fees only, and the monthly fee is R35. Furthermore, it explained that the service fee of R35-R68.40 applies to the credit loan facility and the credit facility, which are two completely separate products. 

The Respondent’s website accessed at https://www.capitecbank.co.za/global-one/credit/rates-and-fees, discusses the rates and fees for various credit facilities offered by Capitec, and states that the Monthly service fee for loans is "R35 – 68.40”; For the Credit card facility the monthly fee is R35; and Credit facility monthly fee is "R35 (without active balance owing) R68.40 (with active balance owing)”.

The Directorate understands the Complainant’s point – a credit card is usually one on which one borrows money, and in that context most people will not pay the R35 fee, but will pay the R68,40.

However, the specific commercial must be considered. In the first place, the commercial opens with the on-screen communication that this is a "new credit card” and it is "one card for all your banking”. It would therefore seem that this is not a credit card in the absolute technical sense, but a colloquial use of the term for a card that might act as both a debit and credit card.

The next screen of the commercial says, "5.1% interest on a positive balance” and immediately after this, it states, "R35 monthly fee”. The R35 monthly fee is therefore communicated in the context of a card that may well have a positive balance.

It is in this context that the Directorate finds that the communication is not misleading. The hybrid nature of the card is such that it is equally likely to have a positive or negative balance, this is communicated clearly, and it correct that the fee for the card and access to the credit facility is R35. It is only when you use the credit facility that the higher fee is activated.

As such, the claim in the advertisement is not misleading nor in breach of Clause 4.2.1 of Section II.

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