During 2023 the ASA saw an increasing number of problematic ads for Tax Repayment Agents services and in May published three rulings covering a range of issues. In December, the CAP and HMRC jointly issued an Enforcement Notice to make clear to advertisers how to keep their ads off the naughty list.
What are Tax Repayment Agents?
Tax Repayment Agents are individuals or businesses who apply on a taxpayer’s behalf for a refund from HMRC. The rulings covered services offered for tax refunds on PPI claims, tax paid on earnings and unclaimed marriage tax allowance, but other specific tax refund claim services could be advertised.
In many instances, any refund received is paid directly to the agent as opposed to the taxpayer and the agent’s fees taken directly from the refund before the remaining amount is passed onto the taxpayer. Such a process should be made clear within ads, as should the amount payable to the agent, with the rulings seeing fees of 36%, 42% and 48% of the total refund.
As of March 2023 HMRC ended the system of assignments so that now only nominations may be used. However, advertisers should take note that whilst the rulings mention the previous assignment system, we would still expect commitments associated with a nomination service to be clearly highlighted to consumers within ads.
What are the problems with ads?
The ASA ruled on a number of ads which were, in various ways, misleading consumers. The CAP Code requires advertisers to give consumers all the relevant information they need to decide whether (or not) to use a service. It’s not acceptable to argue, as some of the advertisers did, that their inclusion in the T&Cs meant that significant pieces of information didn’t need to be included in the ads themselves.
Recurring problems with the ads included:
- Omitting that fees were payable to the agent (and that these would be deducted from the refund).
- Not making clear that consumers were entering into a contractual agreement if they used eligibility checks on the agent’s website.
- Neglecting to highlight the fact that HMRC offers a free route to claim such refunds.
- Suggesting that online tools provided by the advertisers could assess a consumer’s eligibility for a refund when this wasn’t the case.
- Presenting ads to seem as though they were endorsed by HMRC when they weren’t.
- Using claims that were unsupported by evidence or overclaiming potential refund amounts or the number of consumer eligible for refunds.
So, while agents can promote their services, it’s vitally important that they do so in a way that doesn’t leave their potential customers short-changed on the facts. After all, alongside death and taxes, one of life’s certainties is the omission of material information breaking the CAP Code rules around misleadingness.
A good place to start if you’re running ads for Tax Repayment Agents service is the Enforcement Notice and relevant rulings. If you’re still not sure about the suitability of an ad the CAP Copy Advice Team are always on hand to set you right.
- Financial products and services
- Online, catch-up TV and radio, in-app and in-game
- Mailings, email, phone/fax and messaging
- Poster and other out of home
- Newspapers, magazines and printed materials