ASA Adjudication on UK Logical Ltd

Ad

A regional press ad, for UK Logical's claims management service, stated "Like to Legally Clear your Credit Cards & Loans? Not Debt Management or IVA 80% + Audit Success No hidden charges!!! Yours issued before April 2007?" The ad also featured a website address and telephone number.

Issue

Lloyds TSB challenged whether the following claims were misleading and could be substantiated:

1. "Like to Legally Clear your Credit Cards & Loans", and

2. "No hidden charges".

CAP Code

Response

1. UK Logical explained that their business involved directing customers to solicitors who specialised in financial claims compensation.  They said the solicitors audited claims submitted by customers to establish whether or not unfair contract terms had been applied or whether the contract was unenforceable, because, for example, it breached the Consumer Credit Act.  If the audit was successful, that is, the contract was found to be unenforceable, the solicitors would take on the case.  UK Logical said 155 audits had been conducted to date, of which 140 had been successful but did not submit relevant documentary evidence.  That equated to an audit success rate of 90.3%.  They nevertheless quoted a figure of "80%+" as a conservative measure.

2. UK Logical said they took pride in being open and transparent about their fees.  They pointed out that the ad directed readers to their website where they could access information about 'Fees & Refunds' and sent us a copy of the content of that webpage.

Assessment

1. Upheld

The ASA understood that, if the solicitor's audit of a loan agreement was successful, as defined above, the solicitor would then be prepared to challenge the enforceability of the loan.  We noted UK Logical said 140 out of 155 audits had been successful.  We nevertheless understood that it did not necessarily follow that 140 successful audits equated to 140 loan or credit card agreements being cleared; we understood that this would involve legal proceedings and it could be a potentially lengthy and complex process and that the circumstances in which a loan could be cleared or written off were extremely limited.

We considered that the reference to "80% + Audit Success", coupled with the claim "Like to Legally Clear your Credit Card & Loans?", was likely to be understood by readers to mean that UK Logical had an 80% and above success rate at clearing customers' credit card debts and loans.  Because we had not seen evidence demonstrating that that was the case, we considered that the ad was likely to mislead readers about the likelihood of their debts being written off.

2. Upheld

We noted the information provided by UK Logical about their fees, which stated that if they concluded that a particular credit agreement was enforceable and that the matter could not be taken further, the fee paid would be refunded but a £50 administration charge would be deducted.  We considered that, while consumers might expect to incur some costs if their case was taken further, the ad did not make it clear that UK Logical charged fees to conduct initial reviews of credit agreements, and, although those were refunded in the event of an unsuccessful audit, a £50 charge per agreement was still applied.  Because the ad failed to make clear that fees applied to the service, we concluded the claim "No hidden charges" was misleading.

On both points, the ad breached CAP Code clauses 3.1 (Substantiation), 7.1 and 7.2 (Truthfulness).

Action

The ad must not appear again in its current form.

Adjudication of the ASA Council (Non-broadcast)