ASA Adjudication on Barket Financial Management Ltd

Ad

A TV ad for Barket Financial Management Ltd (BFM) contained voice-over in Bengali and on-screen text in English which stated "Take control of your finances now! Stop creditors & debt collectors writing and calling you! Credit card - personal loans - Clear all your debts - Stop repossession - Repay only 25% of your total debt (subject to T&C) - Regain control of your finances in 60 months - Avoid being blacklisted - We try to offer a solution to all your financial problems and will consider all situations - Call us today for free advice." BFM's name and contact telephone was shown at the bottom of the screen.

Issue

1. A viewer, who was a former financial adviser, challenged whether the ad was misleading because he believed it suggested BFM provided Individual Voluntary Arrangements (IVAs) when they were not licensed to do so and instead acted as mortgage brokers.

He also challenged whether the following claims were misleading and could be substantiated:

2. "Stop repossession";

3. "Stop creditors and debt collectors writing and calling you!" because he believed creditors reserved the right to pursue a debtor for monies owed;

4. "Repay only 25% of your total debt (subject to T&C)", because he believed only a creditor could decide whether and by how much they would write off a debt and

5. "Avoid being blacklisted", because he did not believe there was any such thing as a "blacklist".

BCAP TV Code

Response

1. BFM said the ad made no claim that they were licensed IVA practitioners. They said they were licensed by the Office of Fair Trading (OFT) to provide debt adjusting and debt counselling services and that they acted as intermediaries for Guardian Debt Management Ltd (Guardian), who offered a range of debt management solutions, including IVAs.

2. BFM said repossessions could be stopped or avoided by the mortgagee selling their property to a company who would then rent it back to them. They said Guardian offered a sale and lease back product.

3. BFM said that, if a consumer entered into a debt management programme with Guardian, all creditors were requested to deal direct with Guardian, who acted on the consumer's behalf. They said it was common practice for the debtor to liaise with Guardian on all matters unless the relationship between Guardian and the customer had broken down or the creditor did not receive the agreed monthly payments from Guardian.

4. BFM said the ad stated that repayment of only 25% of total debt was subject to terms and conditions.

5. BFM said they believed "blacklisted" was a word commonly used to describe someone who was registered as a bad debtor and that, by avoiding repossession through remortgaging or selling a property, a customer could avoid being described as such.

ATN Bangla UK (Bangla TV) endorsed BFM's response.

Assessment

1. Upheld

The OFT confirmed that BFM held a Consumer Credit Licence that permitted them to offer Debt Adjustment and Debt Counselling services. We understood that a licensed adviser should consider the range of solutions that was available to a client and recommend what was best suited to them. We understood that an IVA might be the most appropriate solution in some situations but not in all. We considered the wording that referred to "Credit card - personal loans - Clear all your debts - Stop repossession - Repay only 25% of your total debt ... Regain control of your finances in 60 months" was wording that was likely to be associated with IVAs in the minds of viewers. We considered, therefore, that the ad was ambiguous in that it suggested BFM themselves could provide IVAs which, because they were not registered insolvency practitioners, they were not permitted to do, rather than the debt adjustment and debt counselling services which they were permitted to provide.

On this point, the ad breached CAP (Broadcast) TV Advertising Standards Code rules 5.1 (Misleading advertising) and 5.2.2 (Implications).

2. Upheld

We understood BFM were permitted under their licence to act as an intermediary between clients and providers who could provide a sale and lease back agreement in which a client paid rent on his or her home and continued to live in it but avoided it being repossessed. We considered the claim "Stop repossession" suggested a guaranteed, successful outcome but understood that, while a sale and lease back agreement might be the most appropriate solution in some situations, it was a serious step and it was not always the case that it was the most appropriate solution. We considered the claim "Stop repossession" did not reflect that.

On this point the ad breached CAP (Broadcast) TV Advertising Standards Code rules 5.1 (Misleading advertising), 5.2.2 (Implications) and 5.2.3 (Qualifications).

3. Not upheld

We understood that, where a client had entered a debt management agreement, then other than in extreme circumstances (such as when the provider failed to forward the agreed payment to a creditor), the provider took over responsibility for day-to-day correspondence with creditors and that creditors would not normally need to correspond with the client as well. Although the viewer was technically correct to say that a creditor "reserved the right" to contact a debtor, we considered that, if the debt management agreement was working as intended, the claim was unlikely to mislead.

On this point we investigated the ad under CAP (Broadcast) TV Advertising Standards Code rules 5.1 (Misleading advertising) and 5.2.3 (Qualifications) but did not find it in breach.

4. Upheld

We noted that the claim was qualified with "subject to T&C." However, because we had not seen evidence that demonstrated a significant proportion of consumers could write off 75% of their debt, we concluded BFM had not substantiated the claim.

On this point, the ad breached CAP (Broadcast) TV Advertising Standards Code rules 5.1 (Misleading advertising), 5.2.1 (Evidence) and 5.2.3 (Qualifications).

5. Upheld

We noted the term "blacklisted" was one in common usage and that BFM's explanation was that, by avoiding repossession, they believed a client could avoid the damage to their credit worthiness that that situation could bring. We also noted, however, that other debt management agreements such as IVAs also had an impact on an individual's credit rating. In the context of the ad, we considered the claim "Avoid being blacklisted" suggested that, by taking BFM's advice, viewers could avoid damage to their credit rating, but that BFM had not demonstrated that was the case. We concluded BFM had not substantiated the claim.

On this point the ad breached CAP (Broadcast) TV Advertising Standards Code rule 5.1 (Misleading advertising).

Action

The ad must not be broadcast again in its current form.

Adjudication of the ASA Council (Broadcast)