The Advertising Standards Authority has upheld two complaints against mortgage providers, which highlight the way in which advertising or documents can be interpreted as misleading.
Intelligent Finance was first criticised for inferring customers had to supply their mortgage lender with information about their contents insurance, when data was in fact being stored for marketing purposes.
A mailing headed Ensuring the information we hold on your buildings insurance cover is up to date suggested the mortgage lender should hold accurate information on each customer’s existing building insurance.
However, complainants successfully argued to the ASA the lender had no legitimate interest in requesting details concerning their contents insurance and believed the information was being gathered for marketing purposes.
While Intelligent Finance may have had no grounds for requesting contents insurance information, it appears to be at the discretion of the mortgage lender to decide whether they are informed of any changes to a borrower's buildings insurance.
The Council of Mortgage Lenders handbook – which can be adopted by lenders on a voluntary basis – says lenders can specify to be informed if the homeowner’s insurance cover does not meet the lender’s requirements as well as request confirmation and a copy of the insurance certificate at the time a mortgage is taken out.
There is no information within the CML handbook, however, to specify whether the client has to keep mortgage lenders informed of any changes to their buildings insurance once a mortgage has been purchased.
At the same time as the complaints against Intelligent Finance were upheld by the Advertising Standards Authority, a Northern Rock advertisement headline was also criticised for suggesting all customers would be given the same deals as new customers.
Closer inspection of the advertisement in fact suggests the advertisement should instead have said "northern rock treats all of its mortgage customers like a new customer, all of the time" as savers discovered they were not offered the same savings deals as new savers and the advert related only to mortgage customers.IFAonline
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