A With Approved Credit (WAC) statement is a qualifier used in advertisements to clarify that the promotional offer is conditional on the buyer having an adequate credit rating.
WAC statements frequently appear in advertisements for financing offers, such as hypothetical lease terms in a new car ad.
Key Takeaways
- WAC statements serve as disclaimers in advertisements.
- These statements ensure that the promotional offer is subject to a credit approval process.
- Using WAC statements protects advertisers against accusations of misleading consumers.
The Purpose of WAC Statements
WAC statements are indispensable in ads to protect advertisers from claims of deceptive advertising. Commonly referred to as the ad’s “fine print,” these qualifying statements specify conditions associated with the offer being promoted.
When it comes to WAC statements, they usually pertain to financing terms for products such as cars or other big-ticket items. These advertisements often feature enticing incentives like interest-free periods or minimal down payments.
The Role of WAC in Risk Management
Including a WAC statement is a critical risk minimization strategy for advertisers. Without this disclaimer, advertisers might face allegations of bait-and-switch tactics, which involve offering a product or service that many customers cannot obtain at the advertised price or terms. Bait-and-switch practices are considered fraudulent and violate consumer protection laws. Consequently, companies include WAC statements to disclose the conditions of their offerings transparently.
WAC statements typically specify that to qualify for the advertised terms, customers must undergo a credit approval process considering factors such as credit rating, current income, and employment status. However, consumer protection laws like the Equal Credit Opportunity Act (ECOA) restrict companies from considering personal identity factors such as ethnicity, gender, age, religion, or sexual orientation.
Example of a WAC Statement
Laura is in the market for a new car and spots a TV ad for a vehicle that seems ideal. Despite its typically high price, the ad offers an appealing financing package, including a minimal down payment and low interest rates for the first 12 months.
Upon closer examination, she notices fine print in the ad stating a WAC disclaimer. This note specifies that the attractive financing terms are conditional on a credit approval process, which considers credit score, current income, and collateral. Given Laura’s poor credit score and limited collateral, she anticipates that she would not qualify for the offer.
Related Terms: credit rating, lease terms, big-ticket item, interest-free period, down payment, risk minimization, bait-and-switch, fraud, consumer protection laws, Equal Credit Opportunity Act.
References
- Federal Trade Commission (FTC). “Penalty Offenses Concerning Bait & Switch”.
- U.S. Department of Justice, Civil Rights Division. “The Equal Credit Opportunity Act”.
