Accuma Group PLC t/a Accuma Insolvency Practitioners Limited City Tower Piccadilly Plaza Manchester M1 4BT Number of complaints: 1

Date: 11 April 2007 Media: Radio Sector: Financial Agency: Emap Advertising

Ad
A radio ad, for Accuma, claimed "If you have debts over £15,000, which of the following options is best for you?  Is it: a) borrowing more money; b) go bankrupt; c) pay your debts 'til you die; or d) get up to 80% of your debts written off ... Accuma provides debt solutions that actually work ... with us, you could have up to 80% of your debt written off ... subject to acceptance.  Conditions apply".

Issue
Debt Free Direct Ltd challenged:

1.  whether the claim "get up to 80% of your debts written off" was misleading and could be substantiated, because they believed the claim exaggerated the amount that most consumers were likely to be able to write off and

2.  whether the ad was misleading, because it did not make clear the fees payable under the terms of an Individual Voluntary Arrangement (IVA).

BCAP Radio Advertising Code:

2 - 3

Response
1.  Accuma said they had stopped broadcasting the ad and had no plans to use it again.  They pointed out that there was no minimum dividend enforced by the Insolvency Act (1986) that provided for IVAs.  They asserted that, in many cases, dividends of less than 20p in the pound had been agreed and debtors had been able to write off at least 80% of their debt.  However, they accepted that debtors often could not write off 80% of their debt.  They pointed out that the ad stated "up to 80% of your debt written off ... subject to acceptance.  Conditions apply" and said that made clear that not all debtors could write off the maximum amount of debt quoted in the ad.

The Radio Advertising Clearance Centre (RACC) said they had been assured that some debtors could write off 80% of their debt.  They pointed out that the ad made a conditional offer that consumers "could" have "up to" 80% written off  "subject to acceptance" and that it stated "Conditions apply".

2.  Accuma argued they did not charge debtors for the preparation and supervision of IVAs.  They pointed out Debt Free Direct's own website stated that fees were agreed with and paid by creditors as part of the IVA.

The RACC said they believed consumers understood that costs were generally associated with the products and services promoted in radio ads.

Assessment
Upheld
The ASA noted that Accuma had based the claim "get up to 80% of your debts written off" on a dividend of 20p in the pound and had not taken into account that, when fees were added, debtors would pay a larger amount than the 20% payable to creditors.  We understood that, even taking fees into account, a very small number of debtors might still be able to write off 80% of their debt but considered that, because we had not seen evidence that demonstrated a significant proportion of consumers could do so, the ad exaggerated the benefits of an IVA.  We concluded that the ad was misleading.

The ad breached CAP (Broadcast) Radio Advertising Standards Code section 2, rule 3 (Misleadingness).

Action
We told Accuma to ensure that future similar claims were based on an amount of debt that a significant proportion of consumers could expect to write off, taking into account the impact of fees.

Adjudication of the ASA Council (Broadcast)