Claims management company (CMC) Sanweb (UK), which trades as Ease Your Mortgage, has been ordered to stop broadcasting a radio advertisement that suggested it could be possible for consumers to reduce their mortgage balance by up to 70% by making a claim via the company.
The radio advertisement stated:
“Settlement in your favour could entitle you to write off your current mortgage balance by up to 70 per cent net of fees.”
This claim was based on the idea that borrowers may not be liable for further payments if their lender was guilty of poorly-conducted mortgage securitisations.
Advertising watchdog the Advertising Standards Authority (ASA) acknowledged that in theory it would be possible for a mortgage to be written off on this basis, but that it was unhappy that the company was making this claim before the matter had been tested in a court of law.
Furthermore, were a claimant to be successful on this basis, their entire mortgage would actually be written off. The ASA also believed that the advert was misleading in this respect, as it did not explain that the 70% figure would be the amount the claimant received after the CMC had deducted its fees.
The ASA judgement read:
“The ASA considered that consumers would understand that the advertiser offered a service which made an individual claim against a mortgage lender similar to other claims management companies and that a claim would see their mortgage reduced by up to 70%. We understood from the evidence that it was only theoretically possible that where a mortgage lender had failed to follow the correct procedure when securitising a mortgage, that could result in the balance being written off, and that this had not yet been proven in court. We acknowledged that the ad used words such as “believe”, “may”, “planned court action” and “could”. However, we considered that these words did not make it sufficiently clear that what the advertiser offered was based on a theoretical possibility only and was not a demonstrably successful claim service, i.e. they had not yet successfully written off a consumer’s mortgage balance.
“We noted that the claim the reduction would be “up to 70% net of fees” was based on the premise that if the mortgage had been improperly securitised then the debt would be written off completely and therefore the consumer would have received a maximum of a 70% reduction in their mortgage balance and the rest would cover the fees the advertiser charged. We considered that consumers would not understand what was meant by “up to 70% net of fees” and that it was not sufficiently clear that the reduction of the mortgage was 100% and that the remaining 30% of the outstanding mortgage balance would be owed as a debt in fees owed to the advertiser.
“We considered that the overall impression created by the ad was that for £260 the advertiser could help a consumer reduce their mortgage by up to 70%. However, for the reasons above we understood that this was not the case and therefore concluded that the ad was misleading. We acknowledged that Samweb were willing to make changes to their ads.”
An Ease Your Mortgage spokesman commented:
“We would like to emphasise that the ASA’s only concern was that the way the fees are calculated. We are working with them and are in the process of updating our ad.”
The information shown in this article was correct at the time of publication. Articles are not routinely reviewed and as such are not updated. Please be aware the facts, circumstances or legal position may change after publication of the article.