First Plus ad receives criticism

A recent advertisement run by secured lender First Plus advertising a new secured loan offer has been slated by campaigners and officials, and has been accused of acting as a debt trap that could find vulnerable homeowners falling into high levels of unmanageable debt.

The advertisement, which stars television star Carol Vorderman, is for a new loan that offers a low rate of interest starting at 4.9% for the first ninety days.

However, after the initial ninety day period the interest rate on the loan
rockets to a typical 8.5% rate of interest, and will be far higher for those with damaged credit.

After receiving criticism over the product that was being advertised an official from First Plus said: ‘Consumers don’t have many options at the moment and we are responding to this.’

However, one industry official said: ‘The initial rate is low enough to attract borrowers desperate for credit and who may be struggling to find it elsewhere. Yet 90 days offers negligible benefits and many people may not understand fully that the rate will soar in a very short time. This is a debt trap.’ The timing of the advertisement and product launch has also come under fire, with so many people struggling and so many other lenders reining in on their lending.