Background
Summary of Council decision:
Three issues were investigated, all of which were Upheld.
Ad description
Two internet display ads and a video, which appeared on a social media page belonging to the advertiser:
a. The first display ad stated "Lloyds Customers: The Financial Conduct Authority (FCA) has identified major issues with how Packaged Accounts were sold. You could have been mis-sold your account, click here to find out if you are due a refund … DO YOU HAVE A LLOYDS PACKAGED BANK ACCOUNT? Lloyds Packaged Bank Accounts You could have been mis-sold … ".
b. The second display ad stated "Halifax customers: You could be one of the many due a refund. Simply click below to find out if you are eligible … Halifax Account Refunds Finding out is free and easy, just click".
c. The video, which appeared under the heading "Have you had a Lloyds account? Then this video is for you …", included on-screen text that stated "DOES LLOYDS OWE YOU £3542?*". Smaller text below stated "*AVERAGE CLAIMANT REFUND IN JULY 2014". A voice-over and further on-screen text stated "does Lloyds owe you money? If you had a Lloyds account, they may owe you a refund. Lloyds have been paying out to customers for the last seven years. Isn't it time you applied for your money back? …".
Issue
Lloyds Banking Group plc (Lloyds) challenged whether:
1. ad (a) was misleading, because the FCA had not ruled against Lloyds in relation to the sale of packaged bank accounts (PBAs) and it was also not the subject of FCA enforcement action;
2. the claims in ads (a) and (b) that consumers could click to find out their eligibility were misleading, because eligibility for compensation could not be established without making an application to the relevant bank; and
3. the claim in ad (c) that the average claimant refund in July 2014 was £3,542 was misleading and could be substantiated, in particular because its basis, including the type of claim the figure related to, was not clear.
Response
1. The Claims Guys Ltd said the ad did not state or suggest the FCA had ruled against Lloyds, or taken enforcement action against it, in relation to PBAs. Instead it correctly stated that the FCA had identified major issues with how PBAs were sold. They submitted publications from the FCA, and its predecessor the Financial Services Authority, to confirm that was the case. They believed it was difficult for a claims management company to explain to the public that they might be entitled to a refund without setting out, accurately, that a regulator had identified issues with the relevant product. They also provided information about complaints the FCA had received about Lloyds, including bank accounts.
2. They said given the issues the FCA had identified, it was not misleading for ad (a) to invite consumers to "click here" to find out more about whether they might be due a refund. The Claims Guys believed the claim "click here" was not misleading in either ad and emphasised that they invited consumers to find out whether they satisfied the conditions to receive a refund, the definition of "eligible" being 'satisfying the conditions to do or receive something'. They said a consumer's eligibility was dependent on the legal status and merits of the claim, including whether a customer had been mis-sold a product by a bank, not on whether a bank decided to make an offer of compensation. If the customer satisfied the relevant conditions, they were eligible for a refund and making an application to a bank was simply a method of claiming a refund.
3. They said the claim referred to the average sum obtained by The Claims Guys for PPI (Payment Protection Insurance) claimants against banks in July 2014. The Claims Guys said it was accurate and they provided evidence they believed substantiated the claim. They said the claim did not imply it related to an official statistic for the whole claims management industry. It was not misleading, because it would be understood to relate to the average PPI refund The Claims Guys had obtained, which was more relevant to a potential customer than an industry-wide figure. They said the ad had run only for a short time, but they were willing to amend future versions to refer to the average refund they had obtained from a particular bank in the relevant month.
Assessment
1. Upheld
The claim "The Financial Conduct Authority (FCA) has identified major issues with how Packaged Accounts were sold" was preceded by the text "Lloyds Customers:" and appeared in the context of text such as "… DO YOU HAVE A LLOYDS PACKAGED BANK ACCOUNT? Lloyds Packaged Bank Accounts". As well as directly addressing Lloyds customers, it included references to "… your account" and to the possibility of the target audience having "been mis-sold". The ASA understood it was the case that the FCA had general concerns about transparency in relation to PBAs, and that some Lloyds customers, like those of other relevant banking organisations, might therefore be eligible for compensation. However, we considered the overall impression of the ad was that the FCA had identified specific concerns, amounting to "major issues", with Lloyds' PBAs and that there was therefore a higher likelihood of consumers obtaining a refund from Lloyds than if "major issues" had not been identified. We noted the information The Claims Guys submitted related to general complaints made about Lloyds to the FCA, including about bank accounts generally, but understood it was not the case that "major issues" had specifically been identified in relation to Lloyds' practices around PBAs. We therefore concluded that the ad was misleading.
On that point, ad (a) breached CAP Code (Edition 12) rule 3.1 3.1 Marketing communications must not materially mislead or be likely to do so. (Misleading advertising).
2. Upheld
Ad (a) included the claim "click here to find out if you are due a refund …" and ad (b) stated "Simply click below to find out if you are eligible … Halifax Account Refunds Finding out is free and easy, just click". Both appeared in the context of claims that informed customers of particular banks from which they could be due a refund. While we considered consumers were likely to have an understanding that there would be an application process involved in obtaining a refund, we considered the overall impression of both ads was that by clicking they could quickly determine whether they met the eligibility criteria. However, we understood determining whether consumers were eligible to request a refund was likely to be a more involved process and therefore concluded that ads (a) and (b) were misleading.
On that point, ads (a) and (b) breached CAP Code (Edition 12) rule 3.1 3.1 Marketing communications must not materially mislead or be likely to do so. (Misleading advertising).
3. Upheld
We acknowledged that The Claims Guys were willing to make changes to ad (c). However, we noted that, although it made clear it related to the average claimant refund in July 2014, further information about the basis of the claim "DOES LLOYDS OWE YOU £3542?*" was not provided in the ad. In that context, and in the context of general references to those who had had "… a Lloyds account" and to Lloyds' customers, we considered the claim was likely to be understood that Lloyds customers generally could be eligible for an average refund of £3,542, based on the amount Lloyds had paid to claimants for such claims in July 2014. We noted the evidence The Claims Guys submitted instead related to the average amount its own clients had received for PPI claims made to Lloyds in that month and therefore considered it was not sufficient to substantiate the claim as it was likely to be interpreted. We therefore concluded that ad (c) was misleading.
On that point, ad (c) breached CAP Code (Edition 12) rules
3.1
3.1
Marketing communications must not materially mislead or be likely to do so.
and
3.3
3.3
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) and
3.7
3.7
Before distributing or submitting a marketing communication for publication, marketers must hold documentary evidence to prove claims that consumers are likely to regard as objective and that are capable of objective substantiation. The ASA may regard claims as misleading in the absence of adequate substantiation.
(Substantiation).
Action
The ads must not appear again in their current form. We told The Claims Guys Ltd to ensure their future claims did not state or imply concerns about banking practices were more serious or specific than was the case, or that eligibility to make claims could be determined more quickly than was the case. We also told them to make clear the basis of relevant claims and that they were in a position to substantiate claims as they were likely to be interpreted.
