----< Abbey Advertising. Misleading 2, Unacceptable 1 >---
This Advertising Standards Authority judgement will not be released
before Abbey National's AGM on 26 April.
ASA originally said it would publish it before the 26 but put the date back to May.
Abbey is not the only bank whose adverts the ASA has called "misleading". A trawl of the ASA's website turned up "misleading" judgements on:
Barclays Bank Apr-1999
Bradford & Bingley Aug-1999
Halifax Feb-2001
Woolwich Feb-1999
But this is the only example we have seen of a bank whose adverts the ASA labelled as "unacceptable".
We publish it because an Abbey shareholder has filed a question about it at the Abbey's AGM.
You might also wonder if it is legal for banks to use misleading adverts to encourage you to deposit money with them. So we've included copies of sections 32, 33 and 35 of the Banking Act at the bottom of this email. These sections set out the what the Treasury *may* do when a bank is found to have published misleading adverts.
You can be pretty sure, of course, that the Treasury will take no action against Abbey National.
Confidential
COMPLAINT FINAL REPORT
CASE NUMBER : A01-00569/LCR
ADVERTISER : Abbey National plc
Abbey House 215-229 Baker Street London NW1 6XL
AGENCY : EuroRSGS
MEDIUM : National press
PUBLIC COMPLAINT : Essex
COMPLAINT:
Objection to a national press advertisement, for a bank, that was headlined
"Leave him. He's not worth it." The advertisement stated "No bank manager
will match our free overdraft. Switch your bank account to Abbey National,
the only bank to give you an interest-free overdraft* for your first year.
What's more, if you still want an overdraft after a year, the authorised
overdraft APR is currently 9.9%. And whoever your present bank manager is,
he or she won't offer free everyday banking when you stay in credit, as
Abbey National do...To switch to fair banking call into your nearest branch,
visit our website or call us." The footnote stated ""Comparison based on
interest-bearing current accounts." The complainant challenged the claims:
1. "No bank manager will match our free overdraft";
2. "the only bank to give you an interest-free overdraft" for your first year";
and
3. "whoever your present bank manager is, he or she won't offer free everyday
banking when you stay in credit, as Abbey National do."
(Ed 10: 3.1; 7.1; 19.2)
ADJUDICATION:
1. Complaint upheld
The advertisers sent the conditions of their overdraft offer. They
explained that they offered to match consumers' existing overdraft and agreed
to charge no interest for 12 months if consumers switched their bank account
via the Abbey National Switcher Service. The advertisers said they offered a
maximum of £5,000, 10 times more than that offered by their nearest rival. They
said the overdraft was free as long as consumers did not exceed their overdraft
limit. The advertisers said consumers had to demonstrate only that they had
maintained their account within the limit agreed with their present bank; they
asked for three months of bank statements as proof. The advertisers provided
Moneyfacts information that showed the overdrafts offered by Other banks. They
believed they were justified in using the claim. The Authority acknowledged that
the advertisers were the only bank to offer to match consumers' overdrafts of up
to £5,000 interest-free. It was concerned, however, that the advertisers could
not match the interest-free overdrafts that were offered by some banks, which
were not restricted to 12 months. Because the advertisers matched the free
overdrafts of those banks for only one year, the Authority concluded that the
claim was misleading. It asked the advertisers to remove the claim.
2. Complaint upheld
The advertisers pointed out that no other bank provided an interest-free
overdraft for the first year, although they conceded that some banks
offered a buffer zone, which meant that consumers would not pay interest
on an overdraft in the agreed buffer zone. The advertisers said the buffer
zones offered ranged from £10 to £500. The Authority acknowledged that all
consumers, if their overdraft was no more than £5000, could transfer their
account to the advertisers and have an interest-free overdraft for a year.
It noted, however, that some banks offered consumers an up-to-£500 interest-
free overdraft or buffer zone and that that offer was not restricted to
12 months. Because other banks offered an interest-free overdraft or buffer
zone in the first year, the Authority considered that the claim was
misleading. It asked the advertisers to remove the claim.
3. Complaint upheld
The advertisers asserted that they did not charge for merely having a bank
account or for everyday transactions, which most other banks charged for.
They cited as examples use of cash machines, getting photocopies of cheques,
special presentation of cheques, getting a banker's draft and copy statements
and stopping cheques. The advertisers argued that most competitors charged for
some or all of those transactions. The advertisers said they charged for some
transactions that were carried out on an exceptional basis. The advertisers
sent Moneyfacts information that detailed the advertisers' charges and their
competitors' charges. Although it noted the advertisers levied fewer charges
than did their competitors, the Authority considered that most consumers would
not regard transactions such as special presentation of cheques and obtaining
photocopies of cheques as everyday banking. Because many other banks did not
charge for occurrences that most consumers would regard as everyday banking,
such as direct debit, cheques and ATM withdrawal, the Authority considered
that the claim was unacceptable and asked the advertisers to withdraw it.
A supplement to this newsletter sets out some of the rules on misleading bank advertising. Click here to see it.
----< Discussion about Panorama's "The Borrowers" >---------
Panorama's program on 28 January kicked off revealing discussion of
Mortgage Group's tactics:
http://news.bbc.co.uk/hi/english/audiovideo/programmes/panorama/archive/newsid_1142000/1142984.stm
See also a Transcript of the program is at:
http://news.bbc.co.uk/hi/english/static/audio_video/programmes/panorama/transcripts/transcript_28_01_01.txt
----< Changes to the site >-----------------------------------
Added:
Abbey National customer's report on her findings after serving a
second SARN on the company
http://www.home-repo.org/reposses/sarnresponse.htm
Copy of *unsent* Eversheds/Abbey National letter refusing to supply
documents to customer (evidence of policy breach of Civil Procedure
Rules and simultaneous press promise to supply documents. Abbey has
still not supplied them)
http://www.home-repo.org/reposses/an_ev_es1.html
Copy of EJ Winter/Royal Sun Alliance letters criticising Bob Russell MP
These start at:
http://www.home-repo.org/reposses/ha_lw_mc1.html
Success story 6
http://www.home-repo.org/reposses/reptal14.htm
Updated:
Experian market research survey page now includes public sightings
of Experian data collection activities. This is quite interesting.
http://www.home-repo.org/debt/bad_surv.htm
Lender refusals to supply documents - more tips
http://www.home-repo.org/reposses/refusal.htm
What to do when lenders refuse to cooperate - now includes list
of documents to ask to see
http://www.home-repo.org/dos/whatnext.htm
Abbey National/Dibb Lupton Alsop/Hillside Couriers "call us" note
and phone transcript added to:
http://www.home-repo.org/dos/whatnext.htm
APPENDIX
Banking Act sections on misleading adverts by banks
32.-
(1) The Treasury may after consultation with the Bank and the Building Societies Commission make regulations for regulating the issue, form and content of deposit advertisements.
(2) Regulations under this section may make different provision for different cases and, without prejudice to the generality of subsection (1) above, may in particular-
(a) prohibit the issue of advertisements of any description (whether by reference to their contents, to the persons by whom they are issued or otherwise);
(b) make provision with respect to matters which must be, as well as matters which may not be, included in advertisements;
(c) provide for exemptions from any prohibition or requirement imposed by the regulations, including exemptions by reference to a person's membership of a class whose membership is determined otherwise than by the Treasury.
(3) Subject to subsection (4) below, any person who issues or causes to be issued in the United Kingdom an advertisement the issue of which is prohibited by regulations under this section or which does not comply with any requirements imposed by those regulations shall be guilty of an offence and liable-
(a) on conviction on indictment, to imprisonment for a term not exceeding two years or to a fine or to both;
(b) on summary conviction, to imprisonment for a term not exceeding six months or to a fine not exceeding the statutory maximum or to both.
(4) A person whose business it is to publish or arrange for the publication of advertisements shall not be guilty of an offence under this section if he proves that he received the advertisement for publication in the ordinary course of his business, that the matters contained in the advertisement were not (wholly or in part) devised or selected by him or by any person under his direction or control and that he did not know and had no reason for believing that publication of the advertisement would constitute an offence.
(5) In this section "a deposit advertisement" means any advertisement containing-
(a) an invitation to make a deposit; or
(b) information which is intended or might reasonably be presumed to be intended to lead directly or indirectly to the making of a deposit; and for the purposes of this section an advertisement includes any means of bringing such an invitation or such information to the notice of the person or persons to whom it is addressed and references to the issue of an advertisement shall be construed accordingly.
(6) For the purposes of this section-
(a) an advertisement issued or caused to be issued by any person by way of display or exhibition in a public place shall be treated as issued or caused to be issued by him on every day on which he causes or permits it to be displayed or exhibited;
(b) an advertisement inviting deposits with a person specified in the advertisement shall be presumed, unless the contrary is proved, to have been issued to the order of that person.
(7) For the purposes of this section an advertisement issued outside the United Kingdom shall be treated as issued in the United Kingdom if it is directed to persons in the United Kingdom or is made available to them otherwise than in a newspaper, journal, magazine or other periodical publication published and circulating principally outside the United Kingdom or in a sound or television broadcast transmitted principally for reception outside the United Kingdom.
(8) Regulations under this section shall be subject to annulment in pursuance of a resolution of either House of Parliament.
33.-
(1) If the Bank considers that any deposit advertisement issued or proposed to be issued by or on behalf of an authorised institution is misleading, the Bank may by notice in writing give the institution a direction under this section.
(2) A direction under this section may contain all or any of the following prohibitions or requirements-
(a) a prohibition on the issue of advertisements of a specified kind;
(b) a requirement that advertisements of a particular description shall be modified in a specified manner;
(c) a prohibition on the issue of any advertisements which are, wholly or substantially, repetitions of an advertisement which has been issued and which is identified in the direction;
(d) a requirement to take all practical steps to withdraw from display in any place any advertisements or any advertisements of a particular description specified in the direction.
(3) Not less than seven days before giving a direction under this section the Bank shall give the institution concerned notice in writing of its intention to give the direction stating the reasons for the proposed direction and giving particulars of the rights conferred by subsection (4) below.
(4) An institution to which a notice is given under subsection (3) above may within the period of seven days beginning with the day on which the notice was given make written representations to the Bank; and the Bank shall take any such representation into account in deciding whether to give the direction.
(5) A direction under this section may be varied by a further direction; and a direction may be revoked by the Bank by a notice in writing to the institution concerned.
(6) Any person who issues or causes to be issued an advertisement the issue of which is prohibited by a direction under this section or which does not comply with any requirements imposed by such a direction shall be guilty of an offence and liable-
(a) on conviction on indictment, to imprisonment for a term not exceeding two years or to a fine or to both;
(b) on summary conviction, to imprisonment for a term not exceeding six months or to a fine not exceeding the statutory maximum or to both.
(7) In this section "deposit advertisement" has the same meaning as in section 32 above and subsections (4) and (6) of that section shall apply also for the purposes of this section.
35.-
(1) Any person who-
(a) makes a statement, promise or forecast which he knows to be misleading, false or deceptive, or dishonestly conceals any material facts; or
(b) recklessly makes (dishonestly or otherwise) a statement, promise or forecast which is misleading, false or deceptive, is guilty of an offence if he makes the statement, promise or forecast or conceals the facts for the purpose of inducing, or is reckless as to whether it may induce, another person (whether or not the person to whom the statement, promise or forecast is made or from whom the facts are concealed)-
(i) to make, or refrain from making, a deposit with him or any other person; or
(ii) to enter, or refrain from entering, into an agreement for the purpose of making such a deposit.
(2) This section does not apply unless-
(a) the statement, promise or forecast is made in or from, or the facts are concealed in or from, the United Kingdom or arrangements are made in or from the United Kingdom for the statement, promise or forecast to be made or the facts to be concealed;
(b) the person on whom the inducement is intended to or may have effect is in the United Kingdom; or
(c) the deposit is or would be made, or the agreement is or would be entered into, in the United Kingdom.
(3) A person guilty of an offence under this section shall be liable-
(a) on conviction on indictment, to imprisonment for a term not exceeding seven years or to a fine or to both;
(b) on summary conviction, to imprisonment for a term not exceeding six months or to a fine not exceeding the statutory maximum or to both.
(4) For the purposes of this section the definition of deposit in section (5) above shall be treated as including any sum that would be otherwise excluded by subsection (3) of that section.
[ends]
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