A website for Online Tax Rebates Ltd, www.teachertaxrebate.co.uk, seen in April 2017 included the text on the home page, “The easy way to get a tax refund” which was accompanied by a large button which stated “CLICK HERE TO ESTIMATE YOUR REBATE AND CLAIM”. Underneath, further text stated “If you are an education professional you are entitled to tax relief on certain union and professional fees you pay every year … You may also be able to claim tax relief on any clothing and equipment you purchase for teaching PE and sports lessons. We have an easy-to-use process to claim any tax relief you are entitled to … No Refund - No Fee Promise ….”
The complainant, who believed that the ad did not make clear that commission would be charged on their full tax rebate and not just their professional fees, challenged whether the ad was misleading.
Online Tax Rebates Ltd t/a Teacher Tax Rebate said that the list of union and professional fees, clothing and equipment purchased for teaching PE and sports lessons highlighted popular reasons why teachers might be entitled to a tax refund. The text “we have an easy-to-use process to claim any tax relief you are entitled to” explained what the company did. Further they said that it set out if the process was relevant to a consumer, i.e. if they had already claimed tax relief on their union subscriptions they would not have wanted or expected them to sign up. No statement was made about the fee or how it would be calculated, and no link was established between the union fees and their fee.
They said that the claim “No Refund - No Fee Promise” appeared separately from the above claim and was accompanied by the text “We will check if you are due a tax rebate without charging any upfront fee. It's easy to do, you can lodge a claim in 5 minutes. If we don't obtain a tax refund for you, you won't be charged”. They stated that consumers should have had a reasonable understanding from this that they would check if the consumer was due a tax rebate and if they were, they would then be charged a fee. They believed that consumers would have a reasonable expectation that the company would exercise sufficient skill and care in the claim so as to identify and obtain a tax rebate, if they were due one. They said that if the consumer needed to find out how the fee was calculated, it was available in the Terms and Conditions section, as was common practice amongst all businesses in their sector, if fee information was provided at all. Further, the fee was based on the refund obtained by correcting errors to historic tax calculations, i.e. tax the customer had already paid. The most common reason for teachers was the omission of employment expenses, as it was the teacher’s responsibility to do that. The tax relief was a part of their historic tax calculations from which they could claim a refund. The advertiser charged a fee on this refund. However, the consumer also benefitted from the relief on their future tax payments as they would be lower. The advertiser said they did not charge a fee for this. Other factors may have increased or decreased any potential refund available to the consumer, such as tax being charged incorrectly on the customer’s employments but neither the company nor the customer would have known this until the claim was complete and their tax had been checked for the past years of the claim. The information was set out in the Terms and Conditions and in the sign-up process. The customer was provided with that information six times during the sign-up process before they were able to enter into a claim with the company. They further stated that the disclosure of the fee calculation had no effect on the purchasing decision because, other than for claiming employment expenses, consumers would not know if they were due a refund or the reasons for that until the claim was completed and the tax was refunded. They said that their method of charging a fee based on the total was standard within the tax rebate industry and consumers would generally understand that.
The ASA considered that consumers would understand from the website that Teacher Tax Rebate would help them to achieve a refund on the clothing, equipment, union and professional fees they incurred as part of their jobs. We understood from the advertiser that during the refund process they could have potentially identified more money that may have been eligible to be refunded and that they calculated their fee based on the value of the entire rebate received. We noted that it included money refunded when the consumer overpaid on their income tax due to having a second job, as was the case with the complainant. From the advertiser’s response, we understood that the information was available on the website in the Terms and Conditions, which was accessible at the bottom of the advertiser’s web page and after the consumer had provided their details to request an estimate of the rebate. We considered that the fact that the fee was calculated on all the money the advertiser identified as eligible for refund, which sometimes included more than the clothing, equipment, union and professional fees, was material information that would allow consumers to make an informed decision as to whether to use the service. This information should have been presented prominently before consumers entered their details for an estimate. We considered that the omission of this information from the main ad was likely to mislead consumers and we therefore concluded that the ad was misleading.
The ad breached CAP Code (Edition 12) rules
Marketing communications must not materially mislead or be likely to do so.
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), 3.9 3.9 Marketing communications must state significant limitations and qualifications. Qualifications may clarify but must not contradict the claims that they qualify. and 3.10 3.10 Qualifications must be presented clearly.
CAP has published a Help Note on Claims that Require Qualification. (Qualification).
The ad must not appear again in its current form. We told Teacher Tax Rebate to ensure that their advertising made sufficiently clear and prominently presented how their fee was calculated.