A recent Advertising Standards Authority [ASA] Adjudication has given helpful clarification in respect of two aspects of the way financial claims are marketed. A Claims Management Company [CMC] had carried out a campaign which acknowledged that prospective complainants could handle their own claims, but suggested that if someone did not have the time to process their own claim or they wanted to ensure that they received the maximum reclaim then they should contact the CMC.
The ASA received one complaint about the advertisement. This number of complaints may seem low, but it is not untypical of the numbers of complainants in respect of such marketing. I note that the highest number of complainants in respect of other recent rulings in similar areas regarding CMC marketing is three. Although the volume of complainants should not influence the degree of resource allocated to investigating the complaint, it does provide an indication of the lack of strength of feeling that consumers have in this area.
The complainant challenged whether the marketing was misleading, because the complainant felt the marketing implied that:
- the process of making a PPI reclaim was time-consuming; and
- consumers stood a better chance of getting “the maximum” reclaim available if they used the advertiser’s service.
Is a claim time-consuming?
In respect of the time-consuming issue, the ASA concluded that the marketing did not go so far as to suggest that the process would be time-consuming or complex, “only that some people might want someone else to do it on their behalf”. Because the marketing did not imply that it would be time-consuming for consumers to reclaim PPI themselves, the ASA concluded that the claim was “unlikely to mislead”. The complaint in respect of this issue was, therefore, not upheld.
Will a consumer receive the maximum reclaim?
The issue surrounding whether a customer receives the maximum reclaim is complicated and an issue that has been generally avoided by CMCs who have not wanted to imply that checking the amount of redress received is difficult or that a CMC is more able to do it than a ‘lay person’. In this case, the adjunction shows that the CMC concerned stated that:<>
- they pushed each lender to go back into the client’s full financial history over a period of 15 years because they had found that the more they pushed each lender the more cases they uncovered/
- that lenders did not volunteer that additional information to customers, and customers were, therefore, less likely to identify all of the possible claims they might have against a lender.
- that customers were not aware that they could go back over a period of 15 years to raise a claim and that going back over that period allowed them to obtain a considerable size of settlement, because compound interest and statutory interest added a significant amount to the settlement offer
- that by maximising the number of claims a customer could bring, they could make sure they got a customer the maximum amount they might be entitled to.
The ASA acknowledged that the CMC concerned had based its marketing on the number of claims they made per customer. The ASA also recognised that a customer was able to “identify all of their possible PPI claims themselves” and that “consumers were just as entitled as CMCs to make multiple PPI claims or to make enquiries of lenders regarding their financial history.” However, the ASA did not uphold the complaint as it found the CMC “helped ensure consumers would obtain the full amount they were entitled to from their lenders as a result of mis-sold PPI, which they might not obtain if they dealt directly with the lender or FOS”. Additionally, the ASA concluded that the marketing was unlikely to mislead stating that it “did not consider that [the marketing] implied that consumers would be unable to “get the maximum” themselves.”
Cap Code clarification
The ASA ruling has provided a helpful analysis of the Committees of Advertising Practice [CAP] code Edition 12. In particular, the ruling has provided clarification on the rules relating to misleading advertising (3.1), substantiation (3.7) and exaggeration (3.11).