ASA Adjudication on Post Net Ltd

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Two direct mailings for Advantage Loans sent in plain white envelopes marked “PRIVATE & CONFIDENTIAL”: a. the first direct mailing was addressed "Dear Applicant". Text stated "We have recently been passed your application for a £2000.00 loan by a company that you applied to last year. We have checked the application and we believe that we can help you. Advantage Loans specialise in arranging easy flexible loans of between £200 and £10,000 for customers all over the UK." Further text stated "Please call us as soon as possible we would like to arrange payout on this loan within the next 5 days." Contact details were included and the letter was signed by the Applications Supervisor. A Customer ID number was included at the top of the letter and text near the bottom stated "P.S. If you have your credit or debit card handy you can Fast-Track your application and cut 2 days off the normal processing time!"; b. the second direct mailing featured a similar presentation and wording. Text stated "We have been passed your application for a £16000.0 [sic] loan by a company that you recently applied to … We can help you even if you have CCJs, defaults and arrears." Beneath the customer ID number, text stated "Amount Required: £16000.0 [sic]".

Issue

The ASA received two complaints from recipients of mailings (a) and (b) respectively:

1.  both complainants challenged whether the mailings misleadingly implied that they had applied for the loans detailed.

2.  The ASA challenged whether the envelopes made clear that they contained marketing material.

CAP Code (Edition 11)

Response

Post Net said they took complaints from clients very seriously.  They explained that they conducted their marketing in a number of different ways, including press and directory advertising, and said that they contracted a compliance officer to sign off all new marketing.  Post Net provided the ASA with a copy of their Financial Promotions sign-off procedures.  They said they considered themselves to be compliant in their advertising and took reasonable steps to ensure the values of the Code were upheld.

1.  Post Net said they were passed details of live applicants, actively seeking finance, by brokers so that Post Net could complete the application process that had already been started.  Because they received details of over 5,000 active applications per week, Post Net said they relied on the introduction companies to provide them with the correct data from clients who had given prior consent for their details to be passed on.

Post Net said they had received the information for the first complainant from LeadX, a company which acted as an intermediary between large consumer finance companies in the UK and companies such as Post Net who were specialist finance providers.  They advised us that LeadX had obtained the first complainant's details from the Beat That Quote website, after he visited the website last year.  They explained that as soon as the complainant had contacted them to complain, they had immediately added his details to their in-house suppression database to ensure that he was not contacted again.  They said that the mailing had referred to the complainant as an "applicant", because they had been under the impression that he did have a live application.  Post Net explained that they had also received the second complainant's details from LeadX, but did not provide further information about where LeadX had obtained his details from; they did confirm, however, that the second complainants details had also been suppressed from their database.  Post Net said they had since amended their mailing, but did not specify in what way.

They further explained that, in both cases, they had received the information on the recipients in good faith but accepted that it was incorrect and said they had taken action to ensure that, in future, the information they received from LeadX was in line with their agreement with them, and was factual.

2.  Post Net said they had not marked the envelopes as containing marketing material, because they did not believe the contents constituted marketing material.  They said they felt the mailings were a communication designed to be sent to active clients, which were sent to the complainants in error because the information they received from LeadX was incorrect.  They said the mailings were a continuation of dialogue with active customers and were a response to requests by the customers for their details to be passed for processing.

Assessment

The ASA considered that the mailings were ads for the purposes of the CAP Code.

1.  Upheld

We acknowledged that Post Net had suppressed both the complainants' details following our enquiries.  We welcomed Post Net's assurance that they had taken steps to ensure that the information they received from LeadX was factual and properly sourced.  We acknowledged that Post Net themselves did not collate the data on the recipients of their mailings, but we reminded them that the Code placed ultimate responsibility for the accuracy of marketing material on the advertiser.

We considered that the recipients were likely to be concerned that the mailings stated that Advantage Loans had recently been passed details of an application for a loan that they had not made.  We noted that Post Net had been provided with incorrect information and were therefore unable to show that the recipients had applied for the loans and concluded that the mailings were misleading.

On this point, the mailings breached CAP Code clauses 3.1 (Substantiation) and 7.1 (Truthfulness).

2.  Upheld

We noted Post Net's assertion that the mailings were not marketing material.  We considered, however, that regardless of whether the data they had received from LeadX was correct or not, the mailings did constitute marketing material for the purposes of the CAP Code.  We noted that Post Net obtained recipients' details through a third-party and considered that this indicated that recipients had no prior dealings with Post Net, and were not former or current customers of theirs.  We did not consider that the mailings could constitute private correspondence about an existing relationship or past purchase between Post Net and its customers.  

We noted that the mailings had been sent in plain white envelopes marked with the words "PRIVATE & CONFIDENTIAL", and had addressed the recipients by name.  We concluded that the envelopes should have been clearly marked to indicate that they contained marketing material to avoid confusion or ambiguity about the status of the mailings.

On this point, the mailings breached CAP Code clauses 7.1 (Truthfulness) and 22.1 (Recognising marketing communications and identifying marketers).

Action

We told Post Net to ensure that mailings did not imply that recipients had applied for financial products when they had not; we advised them to conduct more thorough checks on the data they held on potential clients, before sending them marketing material.  We also told Post Net to ensure envelopes were clearly marked to indicate that they contained marketing material.

Adjudication of the ASA Council (Non-broadcast)