ASA condemns 'irresponsible' equity release TV ad from Key

Key ran the TV ad in question in January 2023, which promoted an equity release mortgage product.

The ASA upheld the one complaint made against the advert, which claimed it irresponsibly used fear about the potential of high mortgage rates to promote the product, and misleadingly implied that the equity release plan was comparable to a normal mortgage.

The TV ad included a cartoon sketch of a couple taking advice.

The voiceover stated: “If you’re retired and your existing mortgage deal is coming to an end, you might find your current lender has some bad news regarding your new monthly repayments. So it’s good to know there’s another way. 

We concluded the ad was irresponsible and misleading.ASA

“With an equity release plan from Key, you could clear your current mortgage and, with the option to make reduced or no monthly repayments, you could have more money in your pocket.

"So visit keylaterlife.co.uk to see how we could help, or talk to your mortgage adviser. Key, for the life in later life.” 

In addition, text that appeared on the screen included the warning that equity release will reduce the estate’s value and may affect a person’s entitlement to means-tested benefits.

It added: “Typically, the loan plus compound interest is repaid when the plan comes to an end following death or entry into long term care.

"Clearing existing mortgage with equity release may result in higher cost of borrowing. 55+ homeowners only. Our equity release advice relates to Key branded lifetime mortgages only – a loan secured against your home”.

Key’s position

In its submission to the ASA, Key said the ad made viewers aware of a product that could solve their financial needs and that may be better suited than a standard mortgage.

“It offered a no negative equity guarantee, a fixed-for-life interest rate and the ability to start/stop making payments at any time,” Key said.

The risks around this complex financial product are very clearly dealt with through our advice process and the advert poses no risk.Key spokesperson

Ad clearance service Clearcast, added that it was reasonable for the ad to state some of the possible short-term benefits of taking out a plan with Key as an alternative to a traditional mortgage, and that it “did not unfairly prey on consumers’ cost of living concerns”.

Key said on-screen text made it clear that the advertised lifetime mortgage was only repayable on death or entry into long-term care.

It also believed it was clear that a lifetime mortgage was different to a standard mortgage and that this was reinforced by the statement “So it's good to know there’s another way”.

In addition, the ad signposted people to Key’s website and suggested discussing options with a mortgage adviser.

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. 

“For some older mortgage borrowers, the reality is that they may have to downsize or risk losing their home. Highlighting that those who find themselves in this situation may have options that they have as yet not considered is not socially irresponsible.

“Our advertisement encourages customers to speak to their mortgage broker so they can gauge a balanced view before considering equity release.”

amy.austin@ft.com