Charity Commission Warns Ucas About Marketing Private Loans to Students

The Charity Commission has expressed disapproval over Ucas’ (Universities and Colleges Admission Service) involvement in marketing private personal loans to students.

Last month, the commercial subsidiary of Ucas, Ucas Media, sent direct mail and email marketing materials to students. These materials promoted Future Finance - a company specialising in private loans specifically for students.

A complaint from consumer finance expert Martin Lewis prompted the Charity Commission to issue Ucas’s board with guidance. The charity regulator warned Ucas that it needed to take a step back from commercial activities and to maintain a safe distance from its non-charitable subsidiary.

A Charity Commission spokesperson said: “We’ve contacted Ucas to remind them of their obligations towards their charity. It is now for the trustees to consider our guidance and how they manage their obligations in the best interests of their charity.

“More generally, charities hold important positions of trust in society so it is vital that any relationships with non-charitable organisations are clear to those the charity is set up to help.

“The public rightly expect charities to be driven only by their charitable mission and purpose in everything they do. New guidance from the commission makes clear that trustees should work to defend and promote their independence from non-charitable organisations at all times.”

A statement from Ucas said that the board had discussed the complaint from Lewis, as well as the guidance from the Charity Commission. In response to Lewis, Ucas said:

“Following discussion, we will work with Future Finance to ensure further messages from Ucas Media include clear information on all the funding options available to students, stressing that a government-funded loan should always been the first port of call as well as signal the likely interest rates and terms within the email.

“It is important that everyone has access to high-quality information and advice on all aspects of finance relating to higher education, and we will look to strengthen the information and advice we provide through our website, emails and across social media.”

Ucas did initially defend its use of direct mail and email to target students with commercial loans, explaining that marketing materials were only sent to those who had opted to communications from Ucas Media.

However Lewis was not satisfied with their response, saying: “This is a fundamental error by Ucas. With its privileged position and being seen as an official body communicating with students, Ucas should be whiter than white.

“The charity has to remember that it is there to help admissions for students, and the fundraising from its commercial arm must be a distant, secondary consideration. But this response shows that it isn’t a secondary consideration.

“I again call on Ucas to drop adverts for commercial lenders. Its reputation and brand among students make people feel that it is some form of official communication. The argument that it’s opt-in only, when dealing with impressionable young people, that’s simply not enough of a protection.”

Olga Dolchenko, chief executive of Future Finance, said that their company would never encourage applicants to borrow more than they could afford, and that it always endeavours to make sure students have made full use of government support before taking out a loan.