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Provider wins appeal over 'threatening' pension ad

Provider wins appeal over 'threatening' pension ad

Workplace pension provider Smart Pension has won its appeal against a decision from the Advertising Standards Authority (ASA) that it had used threatening language in its communication.

In October the watchdog ruled that a letter advertising Smart Pension’s services and warning of the consequences for firms failing to introduce a workplace pension, should never again appear in the same "threatening" form.

But in a ruling published today (February 6) the watchdog signalled a changed position as it ruled the ad was unlikely to have caused distress without reason.

Article continues after advert

The ad, received by a business in November 2017, opened with a warning that failure to set up a pension now could soon "blow a serious hole in company finances" with the first two paragraphs mentioning fines and prison sentences.

The ad stated several times that businesses had limited time to make their decision on the provider they want to use, adding: "If you haven’t taken action and put a scheme in place by your deadline, you need to act NOW."

In the original decision, the ASA said while it was not problematic to reference consequences of not complying with auto-enrolment, the letter was "likely to cause distress to recipients without justifiable reason".

ASA appeared to change its stance after Smart Pension argued that the call to action in the letter and the references to potential sanctions from The Pensions Regulator "were the reality of the situation, and that it was therefore not wrong to inform business owners of that".

The provider had provided ASA with examples of times where the regulator had pursued sanctions, including fines and criminal proceedings, against businesses that had failed to comply with the regulations.

Smart Pension also argued that the wording of the letter and insert reflected the reality of the regulations around pensions and was "justified in the context of the regulatory climate in the relevant sector".

In today’s ruling, the watchdog said it considered that distress may have been caused to some recipients whose businesses had not, at that stage, enrolled their staff into a pension scheme.

"However, because it was a legal requirement for businesses to enrol their employees into a pension and the consequences of failing to do so could result in the sanctions outlined in the ad, we considered that such distress wasn’t unjustified," it added.

"We therefore concluded that the ad was unlikely to cause distress to recipients without justifiable reason," the ASA concluded.