Controversial fintech startup Lanistar is back in the wars again after the Advertising Standards Authority ruled that claims made by the firm about the saffety of its card payments product could not be substantiated.
The much-hyped fintech found itself in hot water with the UK's Financial Conduct Authority last year over marketing material that misled customer to believe that it was authorised to provide product or services to consumers.
The firm has since secured the regulator's approval to operate as an Electronic Money Directive (EMD) agent of payments firm Modulr, but seems unable to stay away from controversy.
The ASA investigated complaints over Instagram ads in November that promoted the company's product as “The world’s most secure payment card”.
The watchdog says that the claim was made using outdated information from 2018 on a limited number of competing card products.
In its ruling, the ASA says: "We understood that the card was not yet available to use at the time the ad was published. There was no information, therefore, available that related to how effective the card was at protecting users when used in real life, compared to all other payment cards. Because we considered the evidence was not adequate to substantiate the claim “The world’s most secure payment card”, we concluded that the ad was misleading."
Lanistar has been ordered by the regulator to withdraw the advertising in its current form and told to ensure it holds adequate substantiation for claims made in any future marketing communications.
Lanistar is not the only fintech firm to have fallen foul of the ASA, with buy now, pay later startup Laybuy also in hot water for running ads that claimed that its credit checks did not affect a customer's credit score.
The probe was instigated by a user who believed their credit score had been downgraded following Laybuy's credit check.
In a statement, Laybuy says that the claim "doesn't impact your credit score" had appeared erroneously on its website and had been removed before it was made aware of the complaint by the ASA. The firm says it is working to ensure its future marketing communications are subject to improved internal processes and controls and that it is contacting credit report providers to reverse the impact of its credit searches on affected consumers.