ASA Adjudication on Alliance & Leicester plc

Ad

a. A TV ad for the Alliance & Leicester Premier Regular Saver account showed a nurse initially at work and then relaxing on holiday. The voice-over stated "One stressed out nurse plus one gloriously high savings rate of 12% for one year equals one week of total bed rest. With our great rate fixed for one year which puts HSBC and Lloyds TSB in the shade."

Text at the bottom of the screen stated "Must open new Premier Current Account with minimum £500 monthly funding. Min age 21."

A large caption that stated "12.00%" then appeared in the centre of the screen. A smaller caption above it stated "Premier Regular Saver" and smaller captions below it stated "Gross p.a./AER fixed. One year term. Save Min £10/Max £250 monthly. No withdrawals."

A row of sun loungers next to the one on which the same nurse was shown relaxing showed the following statements: "Alliance & Leicester 12.00%;" "FIXED FOR ONE YEAR;" "HSBC 8.00%" and "Lloyds TSB 8%."

Text at the bottom of the screen stated "Source: Moneyfacts.co.uk Dec 2007. Rates AER. Interest credited annually. Alliance & Leicester plc LE19 0AL."

"Call 0800 XXX XXXX, visit our website or your nearest branch" was stated in voice-over and on-screen text.

b. A regional press ad was headed "Earn more on your monthly savings." A box in the centre of the ad was headed "Compare our rate - Gross/AER p.a. Fixed for 12 Months" and listed the following underneath: "A&L Premier Regular Saver 12.00% - HSBC Regular Saver 8.00% - Lloyds TSB Monthly Saver 8.00% - Halifax Regular Saver 7.00%." Text underneath the box stated "Source: moneysupermarket.com 18/12/07."

Body copy underneath the box stated: "Available when you open a new Premier Current Account - Save a fixed amount from £10 to £250 a month. One year term. Current account must be funded monthly with £500. Minimum age 21."

"Call 0800 XXX XXXX - Click (followed by a website address) - Visit your local branch" appeared underneath.

Footnote text at the bottom of the ad stated "Interest paid on maturity on the anniversary of the first payment due date. If you invest the maximum of £250 per month, £3,000 will be in your account at the end of the 12 month term. At 12.00% interest, you would earn approximately £195 interest (gross) ... To apply for a Premier Regular Saver account, applicants must not currently hold any Alliance & Leicester current account and applicants must not have held any Alliance & Leicester current account in the three months preceding a new Premier Current Account application. Premier Current Account must be credited with £500 per month or fees may be applied."

Issue

Lloyds TSB challenged whether the comparison Alliance & Leicester made between the advertised account and Lloyds TSB's Monthly Saver account was unfair and misleading because:

1. the TV ad did not make clear that the Lloyds TSB account had instant access and permitted withdrawals at any time whereas Alliance & Leicester's did not; and

2. & 3. that neither the TV nor the press ads made it clear that the Lloyds TSB account that Alliance & Leicester used in its comparison did not require a new current account to be opened at the same time.

4. & 5. Lloyds TSB also challenged whether the TV and press ads were misleading for not making clear that the 12% account was not available to existing Alliance & Leicester current account holders.

CAP Code (Edition 11)

BCAP TV Code

Response

1. Alliance & Leicester (A&L) said they had needed to work within the constraints of a 40-second TV ad and considered the level of information conveyed was balanced and proportionate to the medium in which the ad appeared. They said they understood that while the Lloyds TSB account allowed withdrawals, customers were not permitted to replace funds they had withdrawn. They supplied a screen shot from Moneyfacts.co.uk which stated that. They noted that Moneyfacts had summarised that as meaning withdrawals were not permitted. They said A&L's Premier Regular Saver Account allowed customers to withdraw their money early by closing their account without paying a penalty or loss of interest. They believed the on-screen text in the TV ad made clear that the account was designed for a one-year term and that no withdrawals were permitted. They said they had since changed the specification of their account to allow withdrawals without loss of interest or penalty and without having to close the account and that, as a result of that action, the TV ad had been withdrawn.

Clearcast said they had sought and received confirmation that the account comparisons were like for like when the ad was submitted for clearance. They said they had not asked about instant access and withdrawals at that stage but were satisfied that the comparison with the Lloyds TSB account was like for like. They said that now they were aware that the Lloyds TSB account permitted withdrawals but that at the time A&L's did not, then in hindsight they would not have allowed the comparison to be made.

2. & 3. A&L said the main aim of the ads was to ensure customers received an objective comparison of the interest rates offered by the various banks. They said they had made comparisons based on: fixed annual interest rate; regular monthly savings of a fixed amount and a one-year term. They said they did not consider it was necessary to list every difference between the account they offered and those of their competitors. They said the comparison was based on information sourced from moneysupermarket.com and sent an Advertising Verification Certificate issued by moneyfacts.co.uk. The certificate stated that moneyfacts had verified the competitor data and that A&L was entitled to quote moneyfacts.co.uk as the source of the competitor data. A&L said that in their experience, customers looking for savings products were interested primarily in price (interest rates in this case). They cited a customer opinion survey they had carried out between May and August 2007 to back that up. They said they considered the ads highlighted the key requirements of the A&L account, which included the requirement to open a linked current account. They said they understood that Lloyds TSB required Monthly Saver customers to hold a Lloyds TSB current account, but believed that to include additional details about competitor accounts would risk confusing customers.

Clearcast said they had initially considered that because the respective accounts were all available to new customers the comparison was like for like. In hindsight, however, they considered it was a significant difference if the A&L account was available to new customers only.

4. & 5. A&L said the ads stated the requirement that the Premier Regular Saver Account was available only to customers who opened a new Premier Current Account. They said the press ad clarified further that applicants must not hold any A&L current account or have held one within the preceding three months. They said the ads did not specifically address existing customers and believed A&L's market share of current account customers was sufficiently small to ensure that most people who saw the ads would not be existing A&L current account customers. They said the same interest rate was also available to existing A&L current account holders if they took out a protection product.

Clearcast said that, in hindsight, they appreciated that the on-screen text in the TV ad that stated "Must open a new Premier Current Account ..." could be understood to mean that existing A&L current holders were eligible for the Premier Regular Saver account provided they opened a new A&L current account.

Assessment

1. Upheld

The ASA noted A&L's understanding that Lloyds TSB Monthly Saver account customers, although permitted to make withdrawals, were not permitted to replace funds that had been withdrawn; their understanding that Moneyfacts had summarised the Lloyds TSB account as not permitting withdrawals and A&L's assurance that A&L Premier Regular Saver Account customers could withdraw funds without penalty or loss of interest by closing the account early. We considered, however, that the ability to make withdrawals without closing the account, even if those funds could not subsequently be replaced, was a significant feature of the Lloyds TSB account. We noted that A&L had since changed the specification of their account to allow withdrawals without loss of interest or penalty and without having to close the account and that, as a result of that action, the TV ad had been withdrawn. Although we did not consider A&L needed to list all the terms, conditions and points of difference between the accounts they compared, we nevertheless considered the ability to make withdrawals without loss of interest or penalty and without having to close the account was a point of difference at the time the ad was broadcast that made A&L's comparison between their account and the Lloyds TSB account invalid.

On this point the ad breached CAP (Broadcast) TV Advertising Standards Code rules 5.1 (Misleading advertising) and 5.4.6 (Comparative advertising).

2. & 3. Not upheld

We noted that A&L's comparison was based on three criteria: fixed annual interest rate; regular savings of a fixed amount; and a one-year term. We noted the results of the survey they cited showed that customers were interested primarily in price (interest rates) and that they considered the ads highlighted the key requirements of the A&L account, which included the requirement to open a linked current account. We also noted that the Lloyds TSB account required customers to hold a Lloyds TSB current account. Notwithstanding our findings on points 4 and 5 below, we considered this distinction between the A&L and Lloyds TSB accounts was likely to be relevant mainly to customers who currently held both Lloyds TSB and A&L current accounts. We considered those customers were likely to be in a small minority and that the ads were therefore not obliged to make the distinction clear.

On this point, we investigated the TV ad under CAP (Broadcast) TV Advertising Standards Code rules 5.1 (Misleading advertising), 5.2.3 (Qualifications) and 5.4.6 (Comparative advertising) but did not find it in breach.

On this point also, we investigated the press ad under CAP Code clauses 7.1 (Truthfulness), 18.3 (Comparisons with identified competitors and/or their products) and 20.1 (Denigration and unfair advantage) but did not find it in breach.

4. & 5. Upheld

We noted that on-screen text in the TV ad stated "Must open new Premier Current Account ...;" that body copy in the press ad stated "Available when you open a new Premier Current Account ..." and that footnote text in the press ad stated that customers must not currently hold any A&L current account nor have held one in the preceding three months. We also noted A&L's point that the ads did not specifically address existing A&L customers; their view that, because of their market share, most people who saw the ad would not be existing A&L current account holders and that existing A&L current account holders could obtain the interest rate advertised if they also took out a protection product. We considered, however, that the qualifications in both the TV and the press ads were not sufficient to alert potential customers to the fact that existing A&L current account holders could not simply open a new, second A&L current account to take out the account advertised.

On this point the TV ad breached CAP (Broadcast) TV Advertising Standards Code rules 5.1 (Misleading advertising), 5.2.3 (Qualifications) and 5.4.6 (Comparative advertising).

Action

The TV ad must not be broadcast again in its current form. We welcomed A&L's assurance that it had been withdrawn.

The press ad must not appear again in its current form. We told A&L to amend it to make clear, by linking with an asterisk the reference in the body copy of the ad to the need to open a new Premier Current Account to the relevant section of the footnote text, that the Premier Regular Saver account was not open to customers who already held an A&L Premier Current Account, or who had held one in the preceding three months.

Adjudication of the ASA Council (Broadcast)

Adjudication of the ASA Council (Non-broadcast)