The Advertising Standards Authority has upheld a complaint from Lloyds Banking Group over a claims management firm’s advert.
A website for www.hallandhanley.com, seen on 6 December 2016, featured the claim “Free PPI Claim Check. Average Claim £2,162”. Further text stated “NOTE: Please note your PPI Refund payment may be sent direct to you. Once we know you have been paid your PPI Refund we will then send you an invoice for our fee which is of 29% of the total settlement figure plus VAT”.
Lloyds Banking Group challenged whether the claim “Average Claim £2,162″ was misleading and could be substantiated.
In response, Hall and Hanley Ltd provided a spreadsheet which showed that the average amount paid out by banks in June 2014, based on 196 claimants, was £2,162. They also provided a letter that they sent to the Claims Management Regulation Unit (CMRU) in 2014 as part of an audit which showed that they had also sent the spreadsheet to the CMRU as evidence of their average claim. Lastly, they said they were willing to remove the claim from their website.
The ASA considered that, in the absence of specific information to indicate otherwise, consumers would interpret the claim “Average Claim £2,162” to refer to the average of the final amount of compensation claimants had received following the deduction of the advertiser’s fee and VAT, at the time the ad was seen. While the ASA noted that the web page featured text which made clear that fees and VAT would be payable, the text was not positioned near, and did not refer to, the claim “Average Claim £2,162”. The ad watchdog therefore considered that consumers were unlikely to understand the text to mean that the £2,162 figure was the average claim prior to the deduction of fees and VAT.
The ASA understood that the claim was actually based on the amount that creditors had offered claimants prior to the deduction of the fee and VAT referenced in the ad, and also prior to the deduction of other applicable taxes such as income tax, which had not been referenced in the ad. It considered that it was material information for the consumer that the average claim of £2,162 was subject to the deduction of fees and applicable taxes, and therefore that needed to be made clear in the ad.
The ASA was concerned that the average compensation figure had been based on the average amount offered by creditors during just one month. It considered that one month’s data was not sufficient to substantiate a claim concerning the overall average amount of compensation. Moreover, the month it was based on was over two and a half years before the claim was seen, and so the advertiser’s current average monthly claim could be significantly different.
The ASA welcomed Hall and Hanley’s willingness to remove the claim from the website. However, because the ad did not make clear that the average compensation figure was the average amount that claimants would be offered in settlement prior to the deduction of fees and taxes, and because the figure had been based on only one month’s data from 2014, the ASA concluded that the claim was unsubstantiated and misleading.
The ad must not appear again in its current form and the ASA told Hall and Hanley Ltd to ensure that they made clear that fees and applicable taxes applied when quoting average gross compensation figures. The ASA also told them to ensure that the figure was based on current data that covered a sufficiently long period of time.