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Is 'Instant Approval' Deceptive?

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Marketing wants to advertise that we have instant approvals for online applications. In fact, we will look at the credit score and terms requested, but some applications will be told their request is pending or is referred to a lender for review. I'm not keen on this ad from a compliance perspective, but what can I say to back this up?

Most ads I have seen specify "with approved credit". Absent that, I would consider the ad misleading and a UDAP problem. The same for "instant approval". It isn't necessarily instant and your numbers probably back that up. What percentage is approved automatically and instantly? The lower that number, the greater the risk.

You may also find consumer advocate sites that warn consumers to stay away or to thoroughly investigate lenders making such claims. This comes from the bad rap of payday lenders and subprime lenders that advertised such products. You don't want to be confused with them.I don't think you find concrete guidance on this, and what your bank does depends on its appetite for risk.

First published on 8/09/10

First published on 08/09/2010

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