Ad description
A TV ad for Nationwide Building Society, broadcast in March 2012, included a voice-over which stated "At Nationwide, we're committed to helping people onto the property ladder. That's why we offer low deposit mortgages to first time buyers. In fact, every six minutes we help someone buy their first home."
Issue
The complainant challenged whether the ad was misleading because it did not make clear that consumers were required to have a savings account with the advertiser in order to achieve the low deposits referred to in the ad.
Response
Nationwide Building Society (Nationwide) stated that the Society classified 'low deposit mortgages' as those requiring a 10% deposit or less and offered a range of these mortgages to first time buyers without any requirement to hold other products. They said that previously, Nationwide had only offered a 10% deposit mortgage to first time buyers holding a Nationwide Flexaccount as their main current account but that since November 2011 they had made the 10% deposit mortgages available to first time buyers without the need to take out an additional product. They stated that, for first time buyers they offered two-, three- and five-year fixed rate mortgages at 10% deposit.
They believed that the 10% deposit fell within the industry standard of what was accepted as "low deposit" and provided some similar examples from other providers who also referred to mortgages with a 10% deposit as "low deposit". Finally, they stated they had an additional scheme called Save to Buy whereby a low deposit mortgage was available to customers who saved regularly with the Society in a Save to Buy savings account. They explained however that this was only one scheme within the range of low deposit mortgages for first time buyers and made up less than 2% of their total first time buying lending.
Clearcast said the ad had been cleared based on evidence provided by Nationwide which showed that in November 2011, it had opened up their 10% low deposit mortgages to first-time borrowers without the need to take on any other Nationwide products. They stated that Nationwide did offer an even lower 5% deposit mortgage under the "Save to Buy' first time buyers scheme but that this was only available to those who saved regularly with Nationwide in a Save to Buy savings account. They also stated that, based on evidence submitted by Nationwide, the 10% deposit mortgage being offered fell under the industry definition of 'low deposit mortgage'. They stated that they were happy to approve the ad since a number of low deposit mortgages were available to buyers without the need for savings accounts with Nationwide and therefore believed that that ad did not omit any significant limitations or qualifications and was not misleading.
Assessment
Not upheld
The ASA noted Nationwide's lowest rate deposit for a first time buyers mortgage was 5% and that this was only available to first time buyers who had joined its 'Save to Buy' savings scheme. However, we also noted Nationwide offered 10% mortgages to first time buyers who were not existing customers and noted Nationwide had provided evidence from a price comparison website which demonstrated that many mortgage providers referred to their own 90% mortgages as 'low deposit mortgages'. We considered that the 10% deposit rate offered by Nationwide was likely to be understood by consumers as a 'low deposit mortgage'.
We noted the ad referred to low deposit mortgages but that it did not specifically refer to the percentage of deposit necessary to obtain a mortgage for first time buyers. We considered that most viewers would understand from the ad that first time buyers would be able to obtain a low deposit mortgage from Nationwide without having to be an existing customer. We considered that, because Nationwide had demonstrated that it offered low deposit mortgages to new customers who were first time buyers without a requirement that they also held an account with Nationwide, the nature of the offer was clear. We therefore concluded that the ad was not misleading.
We investigated the ad under BCAP Code rules 3.1 3.1 Advertisements must not materially mislead or be likely to do so. (Misleading advertising) and 3.10 3.10 Advertisements must state significant limitations and qualifications. Qualifications may clarify but must not contradict the claims that they qualify. (Qualifications) but did not find it in breach.
Action
No further action necessary.
