The Advertising Standards Authority has upheld a complaint against a claims firm called Unfair Credit Direct which claimed that credit agreements may be unenforceable with an advert headlined ’Mis-sold Mortgages.’
The text in the national press advert read: “”Your unsecured loan & credit card agreements may be unenforceable? Call us now to find out! Do you know that through brand new legislation 70% of credit agreements may be unenforceable?”
A complaint was lodged on the basis that the above statement was misleading, and challenging whether the claim could be backed up.
The ASA also challenged whether the advert should have made clear there was a fee for using the advertiser’s services.
In response Unfair Credit Direct said they had used the advert for two years and had worked with the Ministry of Justice to ensure it was satisfied with the advert.
The firm said that the claim that “70% of credit agreement may be unenforceable” was based on their own industry research, and that it had used the word “may” to allow for the fact the figure may not be correct.
But Unfair Direct also told the ASA that given the legal uncertainty around claims test cases, the company had decided to withdraw the service and would not be offering it again.
The company said it did not charge upfront fees but charged fees once they could progress in contesting a client’s agreement.
It argues that fees were made affordable by monthly payment arrangements, and the company’s terms and conditions made clear that refunds were paid for unsuccessful cases.
In its ruling the ASA says: “The ASA noted that Unfair Credit Direct believed that the word “may” made clear that the 70% figure was conditional.
“However, we did not consider that that alone was sufficient to counter the overall impression created by the ad that, because a large proportion of credit agreements might not be enforceable, it was likely that consumers who fulfilled the conditions stated in the ad could find that their own credit agreement would be unenforceable.”
The ASA says it had not seen evidence that supported the 70% claim, and so concluded that the claim was misleading.
On the second charge about upfront fees, the ASA judged that the advert should have made clear a fee would be payable.
The ASA ruled that the advert must not appear again in its current form. It welcomed the assurance from Unfair Credit Direct that it would not be advertising this service again in future.