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https://www.claimsregulation.gov.uk/...Jan%202010.pdf
also read https://www.claimsregulation.gov.uk/...in%20final.pdf
Marketing and Advertising Claims Management Services: Unenforceable Consumer Credit Agreements
UPDATE: JANUARY 2010
OFT Consultation on sections 77, 78, and 79 of the Consumer Credit Act 1974
The Office of Fair Trading has recently published for consultation guidance on Section 77, 78 and 79 of the Consumer Credit Act 1974. The guidance will be of particular interest to businesses in the Financial Products and Services sector who are offering claims management services to challenge the enforceability of Consumer Credit Agreements. The document includes technical guidance which is aimed at businesses and a more accessible version for consumers.
The consultation document is available on the OFT website.
The deadline for responses to the consultation is 21 April 2010.
There have been a number of developments since the MoJ Claims Management Regulation Monitoring and Compliance Unit first issued specific marketing and advertising guidance in respect of unenforceable consumer credit agreements twelve months ago.
This update is in addition to guidance we have previously issued. Please refer to the Publications section of the Claims Management Regulation web site for further details.
ASA Adjudications
Businesses are reminded of Client Specific Rule 2: “all advertising, marketing and other soliciting of business must conform to the relevant [CAP] code”. This includes web sites. The importance of the CAP code was brought to the attention of businesses in the guidance issued in January 2009.
Over the past 12 months there have been a number of ASA Adjudications in respect of UCCA advertising. We strongly advise any business which is preparing advertising materials to consider carefully the ASA adjudications before the advertising material is published.
1
Marketing and Advertising Claims Management Services: Unenforceable Consumer Credit Agreements – Update January 2010
2
Business
Date of Adjudication
Link to Adjudication online
Cartel Client Review Ltd
14/01/2009
Complaint Ref 45604
Dataforce Accounts & Debt Management Ltd
14/01/2009
Complaint Ref 45592
Debt Free UK Ltd
17/06/2009
Complaint Ref 46414
Claim Management UK Ltd
24/06/2009
Complaint Ref 46452
UK Logical Ltd
15/07/2009
Complaint Ref 46552
Claim Management UK Ltd
28/10/2009
Complaint Ref 47163
The Claims Warehouse Ltd
16/12/2009
Complaint Ref 47786
Businesses may also wish to make use of CAP’s free CopyAdvice service: Copy Advice - CopyAdvice
Failure to comply with the Conduct of Authorised Persons Rules is likely to lead to enforcement action being taken against you, and could put your status as an authorised business at risk.
Summary of Recent Adjudications
An advert will be misleading if:
it exaggerates, or does not accurately reflect, the likelihood of having a credit card or loan balance written off.
it implies that the date of issue of a credit card is the key factor in determining whether or not the consumer credit agreement is likely to be unenforceable.
it exaggerates success rates. Any advert which refers to success rates is not acceptable unless supported by documentary evidence.
it makes unrealistic claims concerning the time a claim takes to reach a conclusion.
it does not accurately reflect the potentially adverse affect on the consumer’s credit rating (See McGuffick v RBS below).
Marketing and Advertising Claims Management Services: Unenforceable Consumer Credit Agreements – Update January 2010
3
Misleading Advertising: Examples
Below is a list of the example statements which have been considered misleading in the past
The use of misleading statements may lead to enforcement action being taken against you, and could put your status as an authorised business at risk.
“If you took your credit card out before April 2007 your outstanding balance could be completely written off.”
“If your CREDIT CARD or LOAN Was Taken out Before April 2007 it Could Be Completely UNENFORCEABLE AND WILL NOT NEED TO BE REPAID.”
“"DUE TO NEW GOVERNMENT LEGISLATION YOU CAN NOW GET YOUR DEBT WIPED OUT.”
“DO YOU HAVE DEBT ON CREDIT CARDS + LOANS? THE DEBT MAY BE UNENFORCEABLE!”
“Like to Legally Clear your Credit Cards & Loans? Not Debt Management or IVA 80% + Audit Success”
“Keep it in mind that you will be completely debt free within three to nine months and your credit history will be clean.”
“Our Solicitors Can Use Government Legislation to Arrange for Your Outstanding Balances to be Written Off and Claim Compensation for You WITHOUT AFFECTING YOUR CREDIT RATING.”
Recent Court Cases
These are Court of Appeal and High Court decisions and are therefore binding on all lower courts, including the County Court. These decisions should be taken fully into account when marketing or advertising. If you are uncertain as to how these decisions affect your business model then you may wish to take legal advice.
Carey v HSBC and Others [2009] EWHC 3417 (QB)
http://www.judiciary.gov.uk/docs/jud...rey-v-hsbc.pdf
McGuffick v The Royal Bank of Scotland Plc [2009] EWHC 2386 (Comm)
http://www.judiciary.gov.uk/docs/jud...fick-v-rbs.pdf
Marketing and Advertising Claims Management Services: Unenforceable Consumer Credit Agreements – Update January 2010
4
Southern Pacific Personal Loans Ltd v Walker [2009] EWCA Civ 1176
http://www.lawreports.co.uk/WLRD/200..._v_Walker.html
For further details, please see our Jan 2010 Claims Management Regulation Bulletin.
SMS Marketing
When advertising by SMS, authorised businesses should be aware of the requirements placed upon then generally by the Data Protection Act 1998, and the Privacy and Electronic Communications (EC Directive) Regulations 2003. More information on your data protection obligations and privacy and electronic communications obligations is available on the Information Commissioner’s Office web site.
Businesses are also reminded of Client Specific Rule 4: “[C]old calling (by telephone, e-mail, fax or text) shall be in accordance with the Direct Marketing Association’s Direct Marketing Code of Practice”. SMS marketing is covered by section 20 of the DMA Code.
also read https://www.claimsregulation.gov.uk/...in%20final.pdf
Marketing and Advertising Claims Management Services: Unenforceable Consumer Credit Agreements
UPDATE: JANUARY 2010
OFT Consultation on sections 77, 78, and 79 of the Consumer Credit Act 1974
The Office of Fair Trading has recently published for consultation guidance on Section 77, 78 and 79 of the Consumer Credit Act 1974. The guidance will be of particular interest to businesses in the Financial Products and Services sector who are offering claims management services to challenge the enforceability of Consumer Credit Agreements. The document includes technical guidance which is aimed at businesses and a more accessible version for consumers.
The consultation document is available on the OFT website.
The deadline for responses to the consultation is 21 April 2010.
There have been a number of developments since the MoJ Claims Management Regulation Monitoring and Compliance Unit first issued specific marketing and advertising guidance in respect of unenforceable consumer credit agreements twelve months ago.
This update is in addition to guidance we have previously issued. Please refer to the Publications section of the Claims Management Regulation web site for further details.
ASA Adjudications
Businesses are reminded of Client Specific Rule 2: “all advertising, marketing and other soliciting of business must conform to the relevant [CAP] code”. This includes web sites. The importance of the CAP code was brought to the attention of businesses in the guidance issued in January 2009.
Over the past 12 months there have been a number of ASA Adjudications in respect of UCCA advertising. We strongly advise any business which is preparing advertising materials to consider carefully the ASA adjudications before the advertising material is published.
1
Marketing and Advertising Claims Management Services: Unenforceable Consumer Credit Agreements – Update January 2010
2
Business
Date of Adjudication
Link to Adjudication online
Cartel Client Review Ltd
14/01/2009
Complaint Ref 45604
Dataforce Accounts & Debt Management Ltd
14/01/2009
Complaint Ref 45592
Debt Free UK Ltd
17/06/2009
Complaint Ref 46414
Claim Management UK Ltd
24/06/2009
Complaint Ref 46452
UK Logical Ltd
15/07/2009
Complaint Ref 46552
Claim Management UK Ltd
28/10/2009
Complaint Ref 47163
The Claims Warehouse Ltd
16/12/2009
Complaint Ref 47786
Businesses may also wish to make use of CAP’s free CopyAdvice service: Copy Advice - CopyAdvice
Failure to comply with the Conduct of Authorised Persons Rules is likely to lead to enforcement action being taken against you, and could put your status as an authorised business at risk.
Summary of Recent Adjudications
An advert will be misleading if:
it exaggerates, or does not accurately reflect, the likelihood of having a credit card or loan balance written off.
it implies that the date of issue of a credit card is the key factor in determining whether or not the consumer credit agreement is likely to be unenforceable.
it exaggerates success rates. Any advert which refers to success rates is not acceptable unless supported by documentary evidence.
it makes unrealistic claims concerning the time a claim takes to reach a conclusion.
it does not accurately reflect the potentially adverse affect on the consumer’s credit rating (See McGuffick v RBS below).
Marketing and Advertising Claims Management Services: Unenforceable Consumer Credit Agreements – Update January 2010
3
Misleading Advertising: Examples
Below is a list of the example statements which have been considered misleading in the past
The use of misleading statements may lead to enforcement action being taken against you, and could put your status as an authorised business at risk.
“If you took your credit card out before April 2007 your outstanding balance could be completely written off.”
“If your CREDIT CARD or LOAN Was Taken out Before April 2007 it Could Be Completely UNENFORCEABLE AND WILL NOT NEED TO BE REPAID.”
“"DUE TO NEW GOVERNMENT LEGISLATION YOU CAN NOW GET YOUR DEBT WIPED OUT.”
“DO YOU HAVE DEBT ON CREDIT CARDS + LOANS? THE DEBT MAY BE UNENFORCEABLE!”
“Like to Legally Clear your Credit Cards & Loans? Not Debt Management or IVA 80% + Audit Success”
“Keep it in mind that you will be completely debt free within three to nine months and your credit history will be clean.”
“Our Solicitors Can Use Government Legislation to Arrange for Your Outstanding Balances to be Written Off and Claim Compensation for You WITHOUT AFFECTING YOUR CREDIT RATING.”
Recent Court Cases
These are Court of Appeal and High Court decisions and are therefore binding on all lower courts, including the County Court. These decisions should be taken fully into account when marketing or advertising. If you are uncertain as to how these decisions affect your business model then you may wish to take legal advice.
Carey v HSBC and Others [2009] EWHC 3417 (QB)
http://www.judiciary.gov.uk/docs/jud...rey-v-hsbc.pdf
McGuffick v The Royal Bank of Scotland Plc [2009] EWHC 2386 (Comm)
http://www.judiciary.gov.uk/docs/jud...fick-v-rbs.pdf
Marketing and Advertising Claims Management Services: Unenforceable Consumer Credit Agreements – Update January 2010
4
Southern Pacific Personal Loans Ltd v Walker [2009] EWCA Civ 1176
http://www.lawreports.co.uk/WLRD/200..._v_Walker.html
For further details, please see our Jan 2010 Claims Management Regulation Bulletin.
SMS Marketing
When advertising by SMS, authorised businesses should be aware of the requirements placed upon then generally by the Data Protection Act 1998, and the Privacy and Electronic Communications (EC Directive) Regulations 2003. More information on your data protection obligations and privacy and electronic communications obligations is available on the Information Commissioner’s Office web site.
Businesses are also reminded of Client Specific Rule 4: “[C]old calling (by telephone, e-mail, fax or text) shall be in accordance with the Direct Marketing Association’s Direct Marketing Code of Practice”. SMS marketing is covered by section 20 of the DMA Code.
