A TV ad for Mortgage.Claims, a mortgage assessment company, shown in December 2018 and January 2019, featured a couple deciding to make a claim to establish whether their mortgage had been mis-sold.
The woman said, “Guess what I’ve found out? We could be due tens of thousands of pounds.” The man replied “Really?” The woman continued, “The people at Mortgage.Claims have worked it all out. They find the mistakes, work out if we’ve been overcharged or mis-sold.” The man said, “I bet you only get a few hundred quid.” The woman replied, “Actually, they’ve assessed over 20,000 mortgages and people are claiming tens of thousands of pounds.”
On-screen text stated “Mortgage.Claims is a trading name of ME Legal and Financial Limited. ME Legal and Financial Limited is regulated by the Claims Management Regulator in respect of regulated claims management activities” and provided the registration number. The voice-over stated, “It costs nothing to find out if you could be owed thousands. Go to [website].”
IssueThree complainants, including a mortgage advisor, who understood claims for mortgage mis-selling were referred to a third party, challenged whether the following claims were misleading and could be substantiated: 1. “They've assessed over 20,000 mortgages”; and 2. “people are claiming tens of thousands of pounds”.
1. ME Legal and Financial Ltd t/a Mortgage.Claims stated that they were acting in a generation and investigative capacity for the claim rather than being the claim processor. However, they provided details of their assessment process. Claimants first had to pass initial vetting on the Mortgage.Claims website, ensuring minimum criteria were met.
Mortgage.Claims then requested the mortgage file from the lender and conducted further assessment, using technology owned by another company in their group (Mortgage Audit Reporting Software Ltd), under licence, to conduct the mortgage analysis. Mortgage.Claims’ assessment involved reading the file in detail, identifying the exact circumstances of the sale, the agreed mortgage arrangement and reviewing the mortgage advice given. They considered that this process established the merits and quantum of a claim, and some claims were rejected at that stage, and the clients were informed.
If a claim passed their assessment, Mortgage.Claims passed the documentation on to their law firm, along with their analysis and an indication of the likely case value. The law firm also completed their own independent vetting, which made use of the Mortgage Audit Reporting Software to provide a full legal analysis, precise quantification of the claim value and evidence of causation to support the claim. Mortgage.Claims stated that claimants who wished to pursue a validated claim could then instruct the firm to represent them, although that was not obligatory. Mortgage.Claims stated there was no express or implied claim in the ad that Mortgage.Claims oversaw or handled the entire claims process. They added it was common for claims management companies (CMCs) to refer claims to third party solicitors and believed that the fact that the claim would be handled by a firm of specialised solicitors rather than Mortgage.Claims would not cause people to take a different transactional decision in terms of deciding whether or not to find out more by visiting the Mortgage.Claims’ website.
Consumers were not charged for the assessment process. Moreover, the website set out the process in more detail. Mortgage.Claims provided a screenshot of their case log showing the number of cases logged on their case management system, relating to mortgage mis-sale and overcharging cases. They confirmed ME Legal and Financial Ltd had assessed over 20,000 files and those which had been assessed as having high prospects of success and a claim value of over £20,000 were passed to their law firm. Some cases and ongoing cases had been assessed by ME Legal and Financial Ltd under its former name, My Legal Club. Although ME Legal and Financial Ltd had re-launched with a new brand name (Mortgage.Claims) and a new marketing approach, the legal entity, underlying model and approach from a consumer perspective remained the same. They provided details of historic mortgage mis-selling cases successfully concluded by a panel law firm in the period of 2015–2018, and the average pay-out received.
Mortgage.Claims explained that claims were decided by the Financial Ombudsman Service (FOS) as per standard complaint procedure, by the Financial Services Compensation Scheme (FSCS) if the claimant’s broker or lender was no longer trading, or through litigation and formal court proceedings. Each variant had its own procedures. The average case time for a mis-sale case was around 18–20 months. Clearcast set out their understanding of Mortgage.Claims’ processes, which mirrored those described above, and reiterated that 24,000 claims had been fully assessed.
2. Mortgage.Claims said cases assessed by ME Legal and Financial Ltd had been settled via a panel law firm by way of the FSCS. They provided supporting documentation. They said their current panel solicitor would only accept cases that had a quantum value of £20,000 or more. Mortgage.Claims stated that the amounts of redress involved in such claims were substantial and that their three-stage vetting process ensured that the merits of the claim had been comprehensively established prior to introducing cases to law firms. They stated that redress in excess of £20,000 had been obtained for a significant number of people who had used the advertiser’s services.
Clearcast said they were advised that the majority of the cases being assessed related to claims worth between £60,000 and £130,000. They understood that the most regularly assessed quantum passed to the law firm for further action was £128,000, with the majority (60%) falling in the £60,000 to £130,000 range. Clearcast had been provided with 10 examples of cases that had been successfully processed where claims were awarded by the FSCS and FOS, two government bodies that had recognised mortgage mis-selling as a valid claim and had accepted Mortgage.Claims’ expert witness report to quantify the value of compensation that should be awarded.
1. Not upheld
The ASA understood that the outcome of a mis-sold mortgage claim was determined by the FOS, the FCSC, or the courts, following their consideration of the circumstances of the mortgage sale and the relevant supporting documentation. We understood that consumers could bring claims directly or engage CMCs to represent them and handle the claim on their behalf. We noted that the ad provided information about the work carried out by Mortgage.Claims in relation to mis-sold mortgage claims, namely that “They find the mistakes, work out if we’ve been overcharged or mis-sold mortgage claims”. The ad therefore gave consumers some information about the type of assessment work Mortgage.Claims carried out. In that context, we considered consumers would infer from the ad’s claims “They've assessed over 20,000 mortgages” that Mortgage.Claims could play a role in helping consumers make a successful claim, because they had experience of assessing a very high number of mortgage files and determining the likelihood of success.
We understood that Mortgage.Claims did not fully process the claims brought to them, but completed an assessment which, if it met certain criteria, was passed to a law firm who could represent the client in their claim. The ad did not mention the role of the law firm, nor did it provide general information about, or an overview of the entire claims process. We considered, however, that the ad was inviting consumers to seek further information about making a claim for mortgage mis-selling and having their circumstances assessed by Mortgage.Claims. On that basis, we did not consider that the absence of information about the role of the law firm was likely to mislead. Because Mortgage.Claims had been involved in the assessment of over 20,000 mortgage case files with a view to determining the likely success of a mortgage mis-selling claim, we concluded the claim “They've assessed over 20,000 mortgages” was unlikely to mislead. On that point, we investigated the ad under rules 3.1 (Misleading advertising), 3.9 (Substantiation), 3.12 (Exaggeration), but did not find it in breach.
We noted the claims under investigation appeared in direct succession “Actually, they’ve assessed over 20,000 mortgages and people are claiming tens of thousands of pounds”. In light of that juxtaposition, we considered consumers would understand that a significant number of the 20,000 mortgage claims with which Mortgage.Claims had been involved had resulted in payment awards of over £20,000. Mortgage.Claims had provided supporting documentation showing redress of over £20,000 had been awarded to seven claimants via FSCS and to two claimants via FOS, which we understood represented a sample of the successful claims handled by ME Legal and Financial Ltd and a law firm.
We noted that those claims were represented by a panel law firm and understood the assessment work had been carried out by ME Legal and Financial Ltd under its former name, My Legal Club. We understood that of the 20,000 files relating to mortgage mis-sales which had been assessed by ME Legal and Financial Ltd, a number had been passed to their law firm, having been assessed as having high prospects of success and with a claim value of over £20,000.
The number of files passed was commercially sensitive information and was not to be disclosed publically, but the advertisers did confirm the number to the ASA, as well as the number of historic mortgage mis-selling cases they had assessed where claimants had received payment awards of over £20,000 after making a claim. We acknowledged that a number of cases involving ME Legal and Financial Ltd had resulted in redress of over £20,000, but did not consider that the number of historic cases was sufficient to represent a significant number of claimants, in the context of the ad’s claims. Because we considered that consumers would infer from the ad that a significant number of the 20,000 claimants who had referred a claim via the business now operating as Mortgage.Claims had received payment awards of over £20,000 after making a claim, which we considered was not the case, we concluded the claim “people are claiming tens of thousands of pounds”, when appearing in conjunction with the claim “They've assessed over 20,000 mortgages”, was misleading. On that point, the claim breached BCAP Code rules 3.1 (Misleading advertising), 3.9 (Substantiation) and 3.12 (Exaggeration).
The ad must not be broadcast again in its current form. We told ME Legal and Financial Ltd t/a Mortgage.Claims to ensure that they did not exaggerate the number of claimants who had received payment awards of over £20,000 after making a claim.