Ad description
A TV ad, for Money Boomerang, featured a voice-over which stated, "Have you taken out a mortgage since November 2004? Did the advisor ensure you could afford the mortgage and it was the right mortgage for you? In some cases, you may have been given the wrong advice. Money Boomerang can carry out a free mortgage review and find out if you were mis-sold. You may have a claim worth tens of thousands of pounds." A couple were seen opening a cheque, made out to the value of £5,300. On-screen text stated "Settlements can vary from £1,000 to £10,000+ depending on type of claim and how many claims you may have. T&Cs apply".
Issue
The complainant, a mortgage advisor, challenged whether the ad was misleading, because it exaggerated the likely payout in the event of a successful claim.
Response
Money Boomerang Ltd (Money Boomerang) said, where a person had been mis-sold a mortgage, it could typically result in them overpaying by £200 to £500 per month for a mortgage product which should have cost much less. They said the average length of the mortgage would be in the region of five to eight years which at the lower end of the scale could result in a claim worth £12,000 to £20,000. They said that figure did not take into account the 8% statutory interest paid on claims, which was added at a compound rate, and therefore could push the value of claims even higher. They said, for example, that with a typical house price in the UK of £227,000 in early 2013, and an average monthly overpayment of £300 over an eight-year period, that would result in a claim figure of £28,800. The addition of interest would bring the total claim to around £35,000. Money Boomerang said it therefore stood to reason that claims would be of a substantial value, but in order to manage the expectations of consumers they felt it was prudent to state that settlements could vary from as little as £1,000 up to in excess of £10,000.
Money Boomerang said that people who had an interest-only mortgage, those who had been placed on an unnecessary and overly expensive sub-prime high interest mortgage, or those who had been persuaded to re-mortgage one or more times, would have potentially even higher claims. The text "depending on type of claim and how many claims you may have" was intended to reflect those situations.
Money Boomerang gave four examples of recent cases that had been assessed by an expert in mis-sold mortgage cases, in which the expert's opinion was that their clients should pursue claims for damages of between £3,377 and £29,828. They said, in their own experience, claims had ranged from £2,500 to £3,400 on products of much lower values. They felt it was not unreasonable for the ad to state that the value of claims might range from as little as £1,000 into tens of thousands of pounds.
Clearcast said they requested substantiation from Money Boomerang in support of the claims "You may have a claim worth tens of thousands of pounds" and "Settlements can vary from £1,000 to £10,000+ depending on type of claim and how many claims you may have". Money Boomerang provided the information referenced above. Clearcast said they took the view that the figures to which Money Boomerang referred were adequately supported as giving a general estimate of the sort of amounts claimants could receive.
Assessment
Upheld
The ASA acknowledged the examples of four claims where Money Boomerang had said an expert in mis-sold mortgages had given their opinion that Money Boomerang's clients could pursue claims of damages of up to around £30,000. However, we understood that those cases had not yet been taken up and therefore no decision as to the level of damages to be awarded, if any, had been made. Money Boomerang had also referenced cases in their own experience resulting in claims of up to £3,400, but we noted we had not seen documentary evidence to that effect.
We considered consumers were likely to understand from the ad that the level of damages awarded for mis-sold mortgages ranged upwards from £1,000, but that it was generally the case that the amount awarded to claimants was considerably higher and that many claimants had received amounts higher than £20,000 or £30,000. Because we had not seen evidence that was the case, we concluded the advertising claims that consumers could have claims "worth tens of thousands of pounds" or that settlements could vary "from £1,000 to £10,000+" were misleading and had not been substantiated.
The ad breached BCAP Code rules 3.1 3.1 Advertisements must not materially mislead or be likely to do so. (Misleading advertising), 3.9 3.9 Broadcasters must hold documentary evidence to prove claims that the audience is likely to regard as objective and that are capable of objective substantiation. The ASA may regard claims as misleading in the absence of adequate substantiation. (Substantiation) and 3.12 3.12 Advertisements must not mislead by exaggerating the capability or performance of a product or service. (Exaggeration).
Action
The ad must not appear again in its current form. We told Money Boomerang they should not make claims for which they did not hold substantiation.
