ASA Adjudication on Land & Property Bank.Com Ltd

Ad

A local press ad stated "CASH CRISIS? Local company offers homeowners fast solution. STOP! DON'T MOVE. Cash in on your house without moving! Sell and rent back. Large cash sum. Discreet sale. Mortgage clearance. Stop repossession. Guaranteed offer. Make a smart move today. Call XXXXX." Further text stated "... The threat of repossession can often put enormous pressure on families. The simplest way to avoid repossession is to sell your home ... More and more people want to release equity in their homes whilst wishing to continue living in the property. The Land and Property Bank will buy your house and you can remain in your house for as long as you require ...".

Issue

The complainant objected that:

1. the claim  "the simplest way to avoid repossession is to sell your home" was misleading, because there were options, other than sale and rent back, which could help people to avoid repossession and which she believed were sometimes simpler and more suitable for them;

2. the claim "you can remain in your house for as long as you require" was misleading because she believed such tenancies were often offered on a short-term basis and there were also other risks to secure tenancies under sale and rent back schemes;

3. it was not sufficiently clear that the ad was a marketing communication.

CAP Code (Edition 11)

Response

1. Land & Property Bank.Com Ltd t/a The Land and Property Bank (The Land and Property Bank) said they agreed there were other options for people, dependent on the state of their repossession and their credit situation, as well as the relationship of their loan and their property value. They said this was clearly explained to potential clients at the time an inspection and consultation on their property was carried out. They said clients also had to take advice from a solicitor before any transaction with The Land and Property Bank was completed. They said their website listed the pros and cons of using their service.

2. They said that, if they entered into a sale and rent back agreement with clients, they had the option of a number of tenancies, a one-month license, a 12-month assured short-hold tenancy, a two-year, five-year, or life tenancy. They said they had people on their books who were renting back from them on all of these options. They said the percentage paid for a property differed depending on the length of the tenancy agreement, but this would be explained to the client at the time of a valuation, including by their own solicitors. They sent a letter from their solicitors, which said they had acted for The Land and Property Bank's parent company, Roxdan Developments Ltd, for the past five years, and during that time had dealt with the acquisition of properties under a variety of terms.

3. The Land and Property Bank said they believed it was sufficiently clear the ad was a marketing communication because it had the word "ADVERTISEMENT" printed at the top of the page.

Assessment

1. & 2. Upheld

The ASA considered that the claim "the simplest way to avoid repossession is to sell your home", in conjunction with other claims such as "Local company offers homeowners fast solution"; "One telephone call to the Land and Property Bank was all it needed to solve the problem"; "Equity can be raised quickly through a fast property sale, so you can clear outstanding debts, reach a quick financial settlement and move on in your personal life" and "you can remain in your house for as long as you require" was likely to mislead by omission, because it did not make sufficiently clear that significant terms and conditions were attached to such an agreement. We considered that the ad therefore could exaggerate the desirability of that option over and above other options, such as negotiating with a current mortgage provider, selling on the open market or (for older home owners) using a regulated equity release product, depending on  circumstances.

We noted we had not seen evidence to show that tenants could always remain in their home for as long as they wanted to, nor had we seen evidence to show what proportion of tenants who signed contracts with The Land and Property Bank stayed for the length of the original contract agreement. We considered that the letter from The Land and Property Bank's solicitors was not sufficient to substantiate the claim "The Land and Property Bank will buy your house and you can remain in your house for as long as you require ..." and concluded that the claims "the simplest way to avoid repossession is to sell your home" and "The Land and Property Bank will buy your house and you can remain in your house for as long as you require ..." were likely to mislead without evidence to show that, including further information about terms and conditions, such as the relationship between the length of tenancy agreement and the monetary offer made on the property.

On this point the ad breached CAP Code clauses 2.2 (Social responsibility), 3.1 (Substantiation), 7.1 and 7.2 (Truthfulness) and 53.3 (Financial products).

3. Upheld

We noted the ad appeared in the form of an article with the headline "CASH CRISIS?" and the name of the author at the start of the piece "EXCLUSIVE By JOHN REA". We acknowledged that the small print at the top of the page stated "ADVERTISEMENT", but considered this was not sufficiently prominent to avoid giving the impression that the ad was a piece of journalism rather than a marketing communication.

On this point the ad breached CAP Code clause 22.1 (Recognising marketing communications).

Action

The ad must not appear again in its current form.

Adjudication of the ASA Council (Non-broadcast)