Image copyright Wonga Image caption The Advertising Standards Authority received more than 30 complaints about the Wonga advert

A TV advert for payday loans firm Wonga has been banned after the advertising watchdog ruled it confused the public about the interest rates that applied.

The commercial featured a conversation between two puppets about the costs of a Wonga short-term loan.

The Advertising Standards Authority upheld the complaints, saying it was misleading by implying a representative APR of 5853% was "irrelevant".

The authority said the advert must not appear again in its current form.

In the advert, the puppets said: "Right, we're going to explain the costs of a Wonga short-term loan.

"Some people think they will pay thousands of per cent of interest. They won't of course - that's just the way annual rates are calculated. Say you borrowed £150 for 18 days, it would cost you £33.49."

'Without clear understanding'

The Advertising Standards Authority (ASA) received 31 complaints about the advertisement.

Wonga said it was not fair or reasonable to view the advert as confusing.

The company insisted the information that appeared on screen had followed industry regulations and was intended to clarify the costs of a loan.

The ASA said: "Whilst we acknowledged that viewers taking out and repaying the loan within the stated time period would not repay 5853% of the loan, we were nevertheless concerned that viewers would be left without a clear understanding of how the information in the on-screen text could be applied to a Wonga loan, given the ad's assertion that the representative APR was not indicative of the cost of the loan.

"We considered that, though it attempted to clarify the costs associated with a Wonga loan, the ad created confusion as to the rates that would apply. On that basis, we concluded that the ad was misleading."

The ASA also found that the representative example, including the representative APR, was not sufficiently prominent in the advert and that the ad irresponsibly encouraged viewers to disregard the representative APR.