Money Boomerang, the claims management company, has been forced to take its advert, targeting customers who may have been mis-sold a mortgage, off the air for exaggerating payout values.
The advert, which asked viewers if they had taken a mortgage out since November 2004, suggested a claim may be due if the adviser had given wrong advice resulting in a payout of “tens of thousands of pounds”.
Following a complaint from a mortgage adviser the Advertising Standards Agency ruled that Money Boomerang could no longer show the advert because it breached the BCAP rules of misleading advertising, substantiation and exaggeration.
In a statement the ASA said: “The ad must not appear again in its current form. We told Money Boomerang they should not make claims for which they did not hold substantiation.”
Money Boomerang said where a person had been mis-sold a mortgage it could typically result in them overpaying by £200 to £500 per month for a mortgage product which should have cost much less.
They said the average length of the mortgage would be in the region of five to eight years which at the lower end of the scale could result in a claim worth £12,000 to £20,000.
And they added this figure did not take into account the 8% statutory interest paid on claims, which was added at a compound rate, which could push the value of claims even higher.
It used the example of a typical house price in the UK of £227,000 in early 2013, and an average monthly overpayment of £300 over an eight-year period, that would result in a claim figure of £28,800.
The company therefore felt justified that claims would be of a substantial value but to manage consumers’ expectations it was “prudent” to state settlements could vary from £1000 up to £10,000.
In its response the ASA said: “We considered consumers were likely to understand from the advert that the level of damages awarded for mis-sold mortgages ranged upwards from £1,000 but that it was generally the case that the amount awarded to claimants was considerably higher and that many claimants had received amounts higher than £20,000 or £30,000.
“Because we had not seen evidence that was the case we concluded the advertising claims that consumers could have claims “worth tens of thousands of pounds” or that settlements could vary “from £1,000 to £10,000+” were misleading and had not been substantiated.”