Key said it was necessary for consumers to obtain regulated advice before proceeding with an application for an equity release product and direct applications from consumers were not accepted.
ASA decision
But in its decision, the ASA said the voice-over claim “you might find your current lender has some bad news regarding your new monthly repayments” would be understood as a reference to potentially increasing mortgage costs, during a wider cost of living crisis.
It therefore said this risked exploiting some viewers’ concerns about their finances, and the fear of increased future mortgage repayments in particular.
It added although viewers would understand that lifetime mortgages and standard mortgages were different products, the ad may make them think that one product could be straightforwardly substituted for the other at the end of an existing mortgage deal.
The ASA also said the text setting out the risks had less prominence than the claims in the voice-over which set out the benefits.
The ASA stated: “Because the ad played on the financial fears of viewers during a cost of living crisis, in particular an older audience who might be struggling financially, and did not make sufficiently clear the likely suitability of a complex financial product, we concluded the ad was irresponsible and misleading.”
It ruled that the ad must not be broadcast again in the form that spurred the complaint.
Key response
A spokesperson for Key told FTAdviser it was “very disappointed” by the ASA ruling and that it takes its marketing and communications “extremely seriously and have robust processes in place to ensure our messaging is clear, fair and not misleading”.
The spokesperson added: “We strongly believe the ASA’s response does not take into account established precedents which have been carefully considered in the execution of this latest ad campaign.
"For example, the signposting and the legal balance statements shown in the advert make it clear that equity release will reduce an individual’s estate and is a more expensive form of borrowing.
"Such statements have been an established precedent for advertising for several years and in our view this ruling goes against those precedents.”
The spokesperson went on to say that the ASA has previously ruled that adverts must be considered alongside the compulsory advice received before a customer can take out equity release – a premise that Key says it incorporated into its advert.
“The risks around this complex financial product are very clearly dealt with through our advice process and the advert poses no risk to our target audience,” the spokesperson stated.
“In the current high interest environment, suggesting that a household’s mortgage payments may increase is not preying on fears, it is a clear reflection of the wider economic downturn the UK is currently facing, with many struggling with the rising cost of living.
