Background
Summary of Council decision:
Seven issues were investigated, of which six were Upheld and one was Not upheld.
Ad description
Three paid-for search ads and a website for National Debt Service seen in July 2020:
a. Ads (a), (b) and (c) all had text at the top which stated “Ad – www.nationaldebtservice.co.uk”. In the first paid-for search ad, larger text underneath stated “Want To Declare Bankruptcy? - Call Us to Find An Alternetive [sic] – Explore All Your Options First”. Other text stated “You Can Stop Creditor Calls. Get One Lower Monthly Payment and Freeze Interest & Charges! Over 400 Customers Come To Us Everyday [sic]. Customers Get An Average of £13,500 Written Off. Avoid Bankruptcy Today. Write Off Debt. Stop Payment Demands Now. Types: 10 Years Experience, Expert Debt Advice, Call Us Today [0161 telephone number]”.
b. In the second paid-for search ad, larger text underneath stated “Government Approved Debt Help – Write Off Up To 80% Of Debt”. Other text stated “You Can Stop Creditor Calls, Get One Lower Monthly Payment and Freeze Interest & Charges”.
c. In the third paid-for search ad, larger text underneath stated “Looking for Debt Help & Advice – Write Off Up To 80% Of Debt”. Other text stated “Write Off Debt You Cannot Afford Using Government Legislation. Get Expert IVA Help Now! Over 400 Customers Come To Us Everyday [sic]. Customers Get An Average of £13,500 Written Off. Freeze Interest & Charges. Avoid Bankruptcy Today. One Lower Monthly Payment. Stop Creditor Calls. Stop Payment Demands Now”.
d. The website https://nationaldebtservice.co.uk contained large text which stated “Debt Keeping You Awake At Night? – Find a solution that is right for you”, followed by a link “Get Debt Help”.
Other text stated “Possible Debt Solutions” above tabs titled “IVA”; “Debt Management Plan”; “Trust Deed” and “Other Debt Solutions”. Under IVA, text stated “What is an IVA? An IVA stands for Individual Voluntary Arrangement and is perhaps our most popular debt solution. Often chosen because of its ability to clear debts, it’s a legally binding agreement between your creditors to repay what you can realistically afford. At the end of the IVA, any remaining debts could be written off. On average, per client, we write off debts of around £13,500”. An example, “Carlo’s IVA Story”, followed. Types of debt which included a bank loan, utilities arrears and payday loans came to £24,114.16. Text in two boxes stated “£876 before plan” and “£160 after plan” followed by other text which stated “Total contractual repayments Reduced by 78.14%. Carlo’s total debt written off was £18,841 over a period of 5 years”. Boxes which stated “Are You Struggling to Pay Your Debt?” and “Reclaim Your Financial Freedom” each contained a link “Get Debt Help”. Testimonials from three clients followed, preceded by text which stated “WE’VE HELPED OTHERS LIKE YOU” and followed by the link “Can We Help You?”
A black box at the bottom of the page was headed “NDS National Debt Service”. It contained company information and text which stated "Subject to eligibility and acceptance. Fees payable. Debt write off applies to unsecured debts only and on completion of an IVA. Your ability to obtain credit will be affected for the medium to long term. Homeowners may be required to release the equity in their property, if unable to release equity and equity is available creditors may request an additional 12 months payments in compensation. Financial Support Systems Ltd provides insolvency solutions to individuals, specialising in IVA. Advice and information on alternative options will be provided following an initial fact find where the individual(s) concerned meets the criteria for an IVA and wishes to pursue it further. All advice given on any alternative options is therefore provided in reasonable contemplation of an insolvency appointment. The Money Advice Service is a free service set up by the Government to help people make the most of their money. If you would like to learn more click [link]”. The logos of the Money Advice Service and the Insolvency Service appeared underneath.
e. An application form on the same website contained text which stated “Let Our Debt Experts Help You. Start reducing your debts – With a form which can be completed in less than a minute”. The form asked enquirers whether they had a regular income; owned their own home; how much debt they had; how many debts they had and how much they could afford to repay each month.
Issue
The Money and Pensions Service (MaPS) challenged whether the:
1. trading name “National Debt Service”, which appeared in the website address and which was referred to in all the ads, misleadingly suggested an affiliation with National Debtline;
2. claim “Government Approved” in ad (b) suggested that National Debt Service (rather than the IVA solution) had been approved by the Government and that the positioning of the Money Advice Service and Insolvency Service logos in ad (d) suggested National Debt Service was endorsed by those organisations;
3. offer in ad (a) “Want To Declare Bankruptcy? - Call Us to Find An Alternetive [sic]” without any assessment of the client’s circumstances was irresponsible;
4. the claim “Write Off Up To 80% Of Debt” in ad (b) exaggerated the amount of debt that enquirers could expect to be written off; and
5. claims “Stop Creditor Calls. Stop Payment Demands Now” in ad (c) and “Start reducing your debts – With a form which can be completed in less than a minute” in ad (e) overstated the ease of stopping creditor calls.
The ASA challenged whether the:
6. testimonials in ad (d), in which the photographs of Zoe and Carlo were stock photographs used on other websites, were genuine; and
7. warning that fees were payable was sufficiently prominent in ad (d).
Response
1. Financial Support Systems t/a National Debt Service said the colour schemes of the websites for National Debt Service and National Debtline were completely different and the branding was not similar at all. They found it difficult to believe that consumers would believe the website for National Debt Service to be affiliated or associated with National Debtline. They believed the name was an accurate representation of their company’s function; that it did not suggest any affiliation with Citizens Advice, a charity or a government body; and was in line with the names of other companies in the sector.
2. National Debt Service said “Government Approved” referred to the solution and not the company. Nevertheless, they said the ad was no longer running and that they would bear the concern in mind for the future. They said they were obliged to display the Money Advice Service and Insolvency Service logos prominently to keep consumers informed of where to go for free, impartial information. They disagreed that the positioning of the logos suggested that National Debt Service was endorsed by Money Advice Service and Insolvency Service – it was simply at the bottom of the web page.
3. National Debt Service said enquirers could enter into solutions with them only after a full assessment of their personal and financial circumstances. They believed it could only be responsible for people who were considering such a serious solution as bankruptcy to look at suitable alternatives and did not agree that offering an alternative to bankruptcy was irresponsible.They said they were qualified to give advice on alternative debt solutions, which included bankruptcy, and were required by FCA regulations to provide sufficient information and explanation so that a debtor could make an informed judgement about whether an IVA was an appropriate solution before entering into one.
4. National Debt Service supplied data which showed that, between 1 January and 31 July 2020, 12% of their customers wrote off 80% or more of their debt.
5. National Debt Service said creditors who abided with the Consumer Credit Act would cease contacting a debtor for a reasonable period of time, generally 30 days, as soon as they were notified by National Debt Service that they were acting on the debtor’s behalf. They said FCA regulations prevented creditors contacting a debtor while National Debt Service was acting for them and was discussing the scope of an IVA.
National Debt Service said it was correct that the contact form could be completed in less than a minute and did not believe the claim, which began “Start reducing …”, suggested that the completion of the form concluded or completed the process of debt solution.6. National Debt Service said stock photographs were used to protect the anonymity of their customers but that the testimonials were genuine. They supplied Feefo reviews for two testimonials. They said two of the testimonials appeared under the name DFH, a trading name of Bridgewater Support Solutions Ltd who were part of Bridgewater Finance Group, of which Financial Support Systems were also a part. They said the testimonies had received initial advice from Financial Support Systems and were referred to DFH for a debt management plan.
National Debt Service said the remaining two testimonials had been emailed to them directly. They supplied the text and said the testimonials therefore did not appear on the Feefo website. They said that they too had received initial advice from Financial Support Systems and were then referred to DFH for a debt management plan.
7. National Debt Service said the fees payable in an IVA were borne by the creditors as part of the debt write-off. They said that, under an IVA arrangement, the debtor paid an agreed and affordable amount into an estate for the benefit of creditors. As part of agreeing to that, creditors also agreed to the amount of fees and expenses that the Insolvency Practitioner could charge to the estate. In agreeing to writing off any balance of debt, the creditors would also be agreeing to bear the burden of fees.
National Debt Service believed the warning that fees were payable was suitably prominent. They said a section of the website, “Our Fees,” set out the fees they charged.In addition, before entering into a solution with them, consumers were required to go through a regulatory call in which they had to discuss fees. The fees were also set out in the proposal which had to be signed by the consumer before entering into any solution.
Assessment
1. Upheld
The ASA considered consumers would not necessarily be familiar with the full names of companies that advertised debt solutions or of the organisations that offered free and impartial advice on dealing with debt. Consumers would, however, be shown a range of search results after an internet search for debt advice. If an advertiser’s name was reminiscent of an organisation that had an association with the Government, Citizens Advice or a body of similar standing, this would provide reassurance and encourage consumers to enquire further with that particular advertiser. At that stage, enquirers were unlikely to be aware of the differences in branding and colour of the websites for National Debt Service and National Debtline. We therefore considered the name National Debt Service suggested an affiliation with National Debtline and concluded that the ad was misleading.
On that point ads (a), (b) and (c) breached CAP Code (Edition 12) rules 3.1 (Misleading advertising) and 3.50 (Endorsements and testimonials).
2. Upheld
We considered consumers would understand from the large text in ad (b) which stated “Government Approved Debt Help” that, by contacting National Debt Service, they were contacting an organisation which, following some kind of approval or vetting process, had been approved by the UK Government to provide help with debt issues. We considered that was likely to provide reassurance and encourage consumers to enquire further with National Debt Service. Because National Debt Service had not been approved by the UK Government in that sense, we concluded that the ad was misleading.
In ad (d), the Money Advice Service and Insolvency Service logos appeared within a more formal looking black box of text which included National Debt Service’s registered name and address, company registration number, data protection registration number and other company information. We acknowledged that National Debt Service was obliged to make the availability of free debt advice known to their clients. However, we considered the way the logos of the Money Advice Service and Insolvency Service were shown beneath that information gave them the appearance of signatories. We concluded that the ad gave the impression of endorsement of National Debt Service by the Money Advice Service and The Insolvency Service.
On that point ads (a) and (d) breached CAP Code (Edition 12) rules 3.1 (Misleading advertising) and 3.50 (Endorsements and testimonials).
3. Upheld
We noted that the phrases “Want To Declare Bankruptcy?” and “Call Us to Find An Alternetive [sic]” were followed by the phrases “Explore All Your Options First” and, later in the ad, “Avoid Bankruptcy Today” and “Expert Debt Advice”. We considered this wording suggested that National Debt Service was qualified to advise on whether or not bankruptcy was the most appropriate way for an enquirer to deal with debt. We understood that, as an authorised Insolvency Practitioner, National Direct Service could “give debt advice in reasonable contemplation of an IVA”. They would be expected to have a fact-finding and information-gathering process with the debtor to establish whether or not they were eligible for an IVA. If they were eligible, National Debt Service could say they were “in reasonable contemplation” and could tell the debtor that they could help them. If the debtor was not found to be eligible, National Debt Service could tell them that but could go no further with their advice.
We acknowledged, therefore, that as long as they had a fact-finding and information-gathering process in place, National Direct Service were able to provide a certain amount of debt advice. However, that did not extend to advising against bankruptcy, which is how we considered the claim would be interpreted.
Because National Debt Service was not qualified to make an assessment of whether or not bankruptcy was a suitable and appropriate option for enquirers, and the potentially serious consequences of that for consumers who were led to believe otherwise, we concluded that the ad was irresponsible.
On that point ad (a) breached CAP Code (Edition 12) rule 1.3 (Responsible advertising).
4. Not upheld
We considered consumers would understand from the large text in ad (b) which stated “Write Off Up To 80% Of Debt” that, if receiving help with debt from National Debt Service, they would have a reasonable chance of being able to write off 80% of the amount of their debt, and that their personal circumstances would determine what they were likely to be able to write off. Because National Debt Service had supplied data which showed that, between 1 January and 31 July 2020, at least 12% of their customers wrote off 80% or more of their debt, we considered there was a realistic chance that, depending on their specific circumstances, customers would be able to write off that proportion. We therefore concluded that the claim was unlikely to mislead.
On that point we investigated ad (b) under CAP Code (Edition 12) rules 3.1 (Misleading advertising) and 3.7 (Substantiation), but did not find it in breach.
5. Upheld
We considered consumers would understand “Stop Creditor Calls. Stop Payment Demands Now” in ad (c) to mean that receiving help from National Debt Service would end calls from creditors and demands for payment.
We acknowledged that the process was designed to ensure that, once notified by National Debt Service that they were acting on their behalf, debtors were given a period during which creditors could not contact them. In that sense, calls and demands for payment from creditors would end. However, we noted that MaPS was concerned that the phrase “Stop Creditor Calls. Stop Payment Demands Now” overstated the ease of stopping creditor calls. We noted that debtors still needed to take out an IVA and that regular payments would still need to be made. Furthermore, we understood that if discussions about the scope of an IVA were still taking place after the breathing space period, creditors would once again be free to contact debtors. We therefore considered “Stop Creditor Calls. Stop Payment Demands Now” overstated the ease of resolving debt with an IVA and was likely to mislead.We considered that the phrase “Start reducing your debts – With a form which can be completed in less than a minute” in ad (e) suggested that the form enquirers would complete in less than a minute would take them some considerable way into the process of dealing with their debt. Again, we noted that MaPS was concerned that the phrase overstated the ease of dealing with debt. While we acknowledged that the form itself could be completed in less than a minute and that the claim began with the wording “Start reducing …”, we nevertheless considered that the idea of being able to solve debt problems with an action that took less than a minute, overstated the speed and ease of taking out an IVA and was likely to mislead.On that point ads (c) and (e) breached CAP Code (Edition 12) rules 3.1 and 3.3 (Misleading advertising).
6. Upheld
We considered consumers would expect the reviews featured on the website to be the genuine views of customers who had received advice from National Debt Service. We considered it was not unreasonable for National Debt Service to protect the identity of their customers, but that the use of stock photographs could arouse suspicion that the testimonials were not genuine.
We noted that Feefo was a review platform that invited verified customers to provide reviews of their experience and that two of the testimonials had been made directly to National Debt Service. We acknowledged there was a link between National Debt Service and DFH, the organisation to which the testimonials referred. However, we considered consumers would expect the testimonials to apply completely to National Debt Service.
Because they did not, we concluded that the testimonials were likely to mislead.
On that point, ad (d) breached CAP Code (Edition 12) rules 3.1 (Misleading advertising) and 3.45 (Endorsements and testimonials).
7. Upheld
We considered that consumers viewing National Debt Service’s website would initially see the heading “Debt Keeping You Awake At Night? – Find a solution that is right for you”, followed by a link “Get Debt Help” and would understand that National Debt Service provided help with debt issues.
As they read on, they would see references to clearing debts and, from the table headed “Carlo’s IVA Story,” would see how monthly payments could be reduced by taking out an IVA. More website sections followed, including a list of the types of debt that could be addressed, then the four testimonials, before the more formal looking black box of text discussed in point 2 above. Towards the top of the black box were seven web link headings – Disclaimer; Terms, Privacy; Complaints, Our Fees and Sitemap. Clicking on “Our Fees” took enquirers to information about the fees that were payable.
Given that enquirers would be looking to deal with and reduce their debt rather than add to it, and given the concerns we have already expressed above about National Debt Service’s ads suggesting an affiliation with National Debtline, endorsement by the UK Government, The Money Advice Service and The Insolvency Service and being unable to substantiate the amount of debt that could be written off, we considered the ad needed to make very clear to enquirers early on, before they began engaging with the content of the website, that a fee applied to National Debt Service’s service.
We noted National Debt Services’s explanation and acknowledged that fees were not listed as a separate charge for debtors to pay. Nevertheless, when agreeing the amount of debt they were willing to write off, we considered creditors would inevitably factor in the fee they would pay to the IVA provider. In that sense, therefore, a fee was incorporated into the amount that a debtor would pay back. Furthermore, we understood that the payments debtors made into an IVA would first go towards the fees, and that only after that would an IVA go towards repaying the debt. If an IVA was to fail early on, debtors were likely to find that the payments they had made would not have gone towards repaying their debt. We considered it was especially important, therefore, that potential clients should be aware that fees were payable.
We considered that the warning that fees were payable was not sufficiently prominent. We therefore concluded that the ad was misleading.
On that point ad (d) breached CAP Code (Edition 12) rules 3.1 and 3.3 (Misleading advertising).
Action
The ads must not appear again in the forms complained of. We told Financial Support Systems t/a National Debt Service to ensure their ads did not mislead by suggesting an affiliation with National Debtline or endorsement by the UK Government, The Money Advice Service or The Insolvency Service and not to overstate the speed or ease of the service. We also told them to ensure they held substantiation to show that any testimonials used were genuine; that a warning that fees were payable was sufficiently prominent and that ads did not irresponsibly steer bankruptcy enquirers towards IVAs without any assessment of the client’s circumstances.
