Ad description

A website for a claims management company, www.hallandhanley.com, seen on 6 December 2016, featured the claim "Free PPI Claim Check. Average Claim £2,162". Further text stated "NOTE: Please note your PPI Refund payment may be sent direct to you. Once we know you have been paid your PPI Refund we will then send you an invoice for our fee which is of 29 % of the total settlement figure plus VAT".

Issue

Lloyds Banking Group challenged whether the claim “Average Claim £2,162" was misleading and could be substantiated.

Response

Hall and Hanley Ltd provided a spreadsheet which showed that the average amount paid out by banks in June 2014, based on 196 claimants, was £2,162. They also provided a letter that they sent to the Claims Management Regulation Unit (CMRU) in 2014 as part of an audit which showed that they had also sent the spreadsheet to the CMRU as evidence of their average claim. Lastly, they said they were willing to remove the claim from their website.

Assessment

Upheld

The ASA considered that, in the absence of specific information to indicate otherwise, consumers would interpret the claim “Average Claim £2,162” to refer to the average of the final amount of compensation claimants had received following the deduction of the advertiser’s fee and VAT, at the time the ad was seen. While we noted that the web page featured text which made clear that fees and VAT would be payable, the text was not positioned near, and did not refer to, the claim “Average Claim £2,162”. We therefore considered that consumers were unlikely to understand the text to mean that the £2,162 figure was the average claim prior to the deduction of fees and VAT.

We understood that the claim was actually based on the amount that creditors had offered claimants prior to the deduction of the fee and VAT referenced in the ad, and also prior to the deduction of other applicable taxes such as income tax, which had not been referenced in the ad. We considered that it was material information for the consumer that the average claim of £2,162 was subject to the deduction of fees and applicable taxes, and therefore that needed to be made clear in the ad.

Notwithstanding the above, we were concerned that the average compensation figure had been based on the average amount offered by creditors during just one month. We considered that one month’s data was not sufficient to substantiate a claim concerning the overall average amount of compensation. Moreover, the month it was based on was over two and a half years before the claim was seen, and so the advertiser’s current average monthly claim could be significantly different.

We welcomed Hall and Hanley’s willingness to remove the claim from the website. However, because the ad did not make clear that the average compensation figure was the average amount that claimants would be offered in settlement prior to the deduction of fees and taxes, and because the figure had been based on only one month’s data from 2014, we concluded that the claim was unsubstantiated and misleading.

The ad breached CAP Code (Edition 12) rule  3.1 3.1 Marketing communications must not materially mislead or be likely to do so.    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  3.7 3.7 Before distributing or submitting a marketing communication for publication, marketers must hold documentary evidence to prove claims that consumers are 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).

Action

The ad must not appear again in its current form. We told Hall and Hanley Ltd to ensure that they made clear that fees and applicable taxes applied when quoting average gross compensation figures. We also told them to ensure that the figure was based on current data that covered a sufficiently long period of time.

CAP Code (Edition 12)

3.1     3.3     3.7    


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