The Advertising Standards Authority has forced claims management company Money Boomerang to pull a television advert in which it was found to have exaggerated the potential payout for a successful mortgage misselling claim.
The firm, which targets borrowers who have received advice from intermediaries, began an advertising campaign in April.
The advert stated that, provided borrowers had taken out a mortgage since November 2004, they may have a misselling claim worth “tens of thousands of pounds”.
An unnamed mortgage adviser challenged whether the advert was misleading on the basis the likely payout figures were exaggerated.
Money Boomerang argued a borrower who was missold their mortgage typically overpays between £200 and £500 a month and the average length of the mortgage would be around five to eight years, resulting in a claim worth between £12,000 to £20,000.
The claims firm provided four examples of recent cases that had been assessed by an expert in missold mortgages which recommended the customer pursue damages of between £3,377 and £29,828. The expert also said the claim that payouts could be worth “tens of thousands of pounds” was “not unreasonable.”
But the ASA said no decision on payouts had been made on the cases cited, and that it had not seen adequate evidence of supposedly successful claims with payouts of £3,400.
The ASA ruled the ad was misleading, and that it must not appear again in its current form.
Trinity Financial Services product and communications manager Aaron Strutt says: “There has of course been misselling in the mortgage market but it has perhaps not been quite as rife as suggested by Money Boomerang.”
Money Boomerang was unavailable to comment.