Claims management companies (CMCs) who provide consumers with help in processing compensation claims for mis-sold financial products, such as Payment Protection Insurance (PPI), face a challenge. Not only are some savvy consumers bypassing CMC services and increasingly handling claims themselves, some CMCs are also prompting complaints and running into problems with the ASA for misleading advertising.
Your company may have plenty to offer, but it’s crucial that you avoid exaggerating or mis-representing what a consumer can expect from your services. If you do, you put yourself at risk of complaints to the ASA, which may result in an investigation, the publication of a formal ruling and subsequent damage to your reputation.
To help you avoid this, here are five top tips to keep in mind when preparing your advertising:
This may sound obvious, but be clear in your communications with consumers. You should always be transparent in presenting any information that’s likely to impact a consumer’s decision to hire you. It’s also important not to exaggerate what you offer and to avoid introducing material information too late.
Be clear about fees
The same is true for the way you communicate your fees. Understandably, for many consumers the fees a CMC charges will have an impact on whether or not to use their services. To avoid nasty surprises – and complaints – later on, you should therefore make sure that you don’t hide information about fees, how they’re calculated or when they are due.
Support your claims
If your advertising claims are likely to be seen as factual by consumers, you need to hold supporting evidence before publishing the ad and be able to produce it on request (to the ASA). Obvious untruths or exaggerations (‘puffery’), which are unlikely to be taken literally by the average consumer, or clear expressions of your own opinion, are likely to be acceptable – provided they do not materially mislead consumers.
Make clear who you are
The CAP Code requires that marketers don’t mislead by omitting their identities. But telling people who you are is also in your own interest - how else are consumers to know that your company can help them with their financial claims? Making clear who you are, and how you can be contacted, can be particularly important when sending marketing by email or text message, so consumers can opt-out of receiving further communications.
Use direct marketing responsibly
Sending unsolicited letters, emails or texts often prompts consumer complaints. Don’t be that company! Not only does this practice reduce the likelihood of recipients even considering your services, but it’s also a problem under CAP’s rules on database practice.
This week (w/c 1 August) we have been sending out more detailed information about the advertising requirements for CMCs, with the support of the Ministry of Justice’s Claims Management Regulation Unit (CMRU), via post and email. This correspondence contains advertising guidance tailored to your industry based on recurring advertising issues and precedent ASA rulings.
If you have not received the letter or email but would like to, or if you have received it and are unsure about the requirements, please contact our Compliance team. If you have any questions about specific aspects of your advertising, please speak to our Copy Advice team.