Ad description
A leaflet, sent to the complainant by fax, for a debt recovery organisation, stated "MAKE YOUR DEBTOR PAY NOT YOU! With a GUARANTEED level of service and over 25 years combined experience let us take the hassle away … NO COLLECTION, NO COMMISSION".
Issue
The complainant challenged whether the ad was misleading because they believed an upfront fee was charged before collection.
Response
Guardian Recovery Ltd said their ad had been approved by the Office of Fair Trading. They said that the ad did not state that there was not an upfront fee and referred only to there not being any commission. They confirmed that no commission was paid until the recovery of money. They also explained that they did charge an upfront administration fee for most of their services. They said that there were many variables that would affect the cost of that fee, such as volume of debts, the amount of work required, legal assistance and credit checking facilities, and, therefore, there was no fixed price. They said the ad was intended to encourage people facing problems with credit management and debt recovery to call them and make an informed decision. They explained that the initial consultation was free. They said that, as part of the registration process, potential clients were informed about the upfront fee on two occasions. They pointed out that clients did not sign up for the service by viewing the ad. They said that they were limited in the amount of information they could put on the ad owing to its size.
Assessment
Upheld
The ASA acknowledged that customers were informed of an administration charge during the initial consultation process. We also noted that the upfront fee was dependent on several variables and that there was not a fixed price. However, we noted that Guardian Recovery did charge an upfront fee for most of their services. We noted that the ad stated "MAKE YOUR DEBTOR PAY NOT YOU!" and "NO COLLECTION, NO COMMISSION", which we considered was likely to give customers the impression that no charge was involved. We considered knowledge of the fee was likely to affect the economic behaviour of the trader to whom the ad was addressed. Because the ad did not include any indication that an upfront fee applied to the service, we concluded the ad was misleading.
The ad breached CAP Code (Edition 12) rules
3.1
3.1
Marketing communications must not materially mislead or be likely to do so.
and
3.3
3.3
Marketing communications must not mislead the consumer by omitting material information. They must not mislead by hiding material information or presenting it in an unclear, unintelligible, ambiguous or untimely manner.
Material information is information that the consumer needs to make informed decisions in relation to a product. Whether the omission or presentation of material information is likely to mislead the consumer depends on the context, the medium and, if the medium of the marketing communication is constrained by time or space, the measures that the marketer takes to make that information available to the consumer by other means.
(Misleading advertising) and
3.9
3.9
Marketing communications must state significant limitations and qualifications. Qualifications may clarify but must not contradict the claims that they qualify.
(Qualification).
Action
The ad must not appear in its current form. We told Guardian Recovery Ltd to ensure that information about upfront fees was included in their ads.
