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Mortgage assessment firm ‘exaggerated’, ASA finds

Mortgage assessment company Mortgage.Claims which seeks compensation on behalf of customers for “financial misselling” has been ordered to not “exaggerate” the number of claimants who received payment awards of more than £20,000.

The Advertising Standards Authority has rebuked the company for suggesting thousands of customers had claimed “tens of thousands” of pounds.

A TV advert shown in December 2018 and January 2019 cannot be broadcast again in its current form, the ASA has ruled after it upheld in part a complaint.

The advert in question featured a couple deciding to make a claim to establish whether their mortgage had been mis-sold.

Mortgage.Claims is part of ME Legal & Financial Limited, which is authorised and regulated by the FCA for regulated claims management services.

The FCA began regulating the claims management industry from 1 April this year.

The ASA has warned ME Legal & Financial to ensure it does not exaggerate the number of claimants who had received substantial awards after using the service.

In the advert the woman featured said: “The people at Mortgage.Claims have worked it all out. They find the mistakes, work out if we’ve been overcharged or mis-sold.”

The man said: “I bet you only get a few hundred quid.” The woman replied: “Actually, they’ve assessed over 20,000 mortgages and people are claiming.”

Three complainants, including a mortgage adviser, who understood claims for mortgage mis-selling were referred to a third party, challenged whether the claims “they’ve assessed over 20,000 mortgages” and “people are claiming tens of thousands of pounds” were misleading and could be substantiated.

In its response ME and Legal Financial trading as Mortgage.Claims stated that it was acting in a “generation and investigative capacity” for the claim rather than being the claim processor.”

The company also provided the ASA with details of its assessment process. Mortgage.Claims argued there was “no express or implied claim” in the ad that Mortgage.Claims oversaw or handled the entire claims process.

It also said it was common for claims management companies to refer claims to third party solicitors. According to the ASA ruling the company “believed that the fact that the claim would be handled by a firm of specialised solicitors rather than Mortgage.Claims would not cause people to take a different transactional decision in terms of deciding whether or not to find out more by visiting the Mortgage.Claims’ website”.

Consumers were not charged for the assessment process, Mortgage.Claims said in its response.

Mortgage.Claims provided a screenshot of its case log showing the number of cases logged on its case management system, relating to mortgage mis-sale and overcharging cases. It confirmed ME Legal and Financial Ltd had assessed more than 20,000 files and those which had been assessed as having high prospects of success and a claim value of over £20,000 were passed to their law firm.

The firm explained that claims were decided by the Financial Ombudsman Service as per standard complaint procedure, by the Financial Services Compensation Scheme if the claimant’s broker or lender was no longer trading, or through litigation and formal court proceedings.

In its assessment of the complaint, the ASA said it understood “that the outcome of a mis-sold mortgage claim was determined by the FOS, the FCSC, or the courts, following their consideration of the circumstances of the mortgage sale and the relevant supporting documentation.”

It did not uphold the complaint in full as it noted the ad provided information about the work carried out by Mortgage.Claims in relation to mis-sold mortgage claims, namely that “They find the mistakes, work out if we’ve been overcharged or mis-sold mortgage claims”. The ad therefore gave consumers some information about the type of assessment work Mortgage.Claims carried out, the ASA said.

And it said it did not consider the absence of information about the role of the law firm was likely to mislead customers.

But it decided to uphold the ad in part considering the “juxtaposition” of the claims made. It said: “We acknowledged that a number of cases involving ME Legal and Financial Ltd had resulted in redress of over £20,000, but did not consider that the number of historic cases was sufficient to represent a significant number of claimants, in the context of the ad’s claims.”

It concluded the claim “people are claiming tens of thousands of pounds”, when appearing in conjunction with the claim “They’ve assessed over 20,000 mortgages”, was misleading.

Mortgage.Claims’s website currently has a red “As seen on TV” logo on its homepage.

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