OLA Unveils Improved Marketing Best Practices

Posted by: Liz Jones

Updated best practices provide clearer boundaries for members and greater transparency for consumers

As part of an ongoing pledge to protect consumers, the Online Lenders Alliance (OLA) has unveiled new, updated Best Practices that clarify the boundaries of marketing short-term, small-dollar loans online.

“Our member companies set the standards for how the industry conducts business,” said Lisa McGreevy, President and CEO of OLA.  “The updated Best Practices offer our members and their vendors a roadmap for marketing financial products in the most transparent way possible.”

As OLA Best Practices are not static, the Alliance is constantly looking for ways to improve the industry with a keen focus on serving customers effectively.  The new guidelines reflect consistency with examination procedures of the Consumer Financial Protection Bureau (CFPB), which prohibits deceptive marketing practices.

The new standards for OLA’s Best Practices are:

Next Day Credit. OLA members, vendors and affiliates are prohibited from advertising “one hour” or “same day” credit given the practical limitations on making loan funds available. Rather, OLA members should ensure that consumers are aware that credit is available the “next day.”

Actually Available Credit. Lenders and lead generators should not publish advertisements for credit in amounts that are in excess of $1,000 unless the lender can actually make such amounts available to consumers.

Credit Checks.  Advertisements should not include the phrase “No Credit Checks.” While OLA members do not run credit checks through the “big three” credit bureaus, they often utilize a specialized credit bureau that serves the small-dollar industry to check a consumer’s background before extending credit.

Loan Terms.  Advertisements must include information regarding:

  • Implications of late payment (i.e., fees, collection activities)
  • Consequences of non-payment (i.e., collection activities)
  • Sustained use (i.e., renewals, extensions, back-to-back loans)
  • Adherence to responsible lending
  • Compliance with applicable state and federal law

Internet Marketing.  All advertisements must provide for a phone number and physical address for the website owner responsible for the advertisement.  Additionally, the Advertising Best Practices apply to domain names as well as website content.

Restore Online Shoppers Confidence Act.  When applicable, any lead generator, or other vendor working with a lender to originate loans, must fully disclose to the loan applicant a separate service is being offered to the applicant for a charge, and is not related to the cost of the loan.  The lead generator or vendor must fully disclose all material terms of the service (i.e., amount of recurring payments, date by which a consumer must cancel the service to avoid payments, etc.).

Wage Garnishment.  Members must not include wage assignments in their agreements and also must refrain from threatening wage garnishment absent a court order.

Formatting and Presentation.  The Best Practices manual has also been modified to ensure that the topics covered in the CFPB Supervision Manual are reflected in the Best Practices.

The Online Lenders Alliance is a professional trade organization representing the growing industry of companies offering online consumer small, short-term loans.OLA member companies abide by a list of Best Practices and Code of Conduct to ensure that customers are fully informed and fairly treated.

For more information, visit www.onlinelendersalliance.org and to download the complete OLA Best Practices, visit Best Practices.

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