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Insolvency ad banned after R3 complaint 19 June 2013

An advertisement in editorial form – or ‘advertorial’ – has been banned by the Advertising Standards Authority (ASA) for denigrating insolvency practitioners and discouraging business owners from consulting them.

The advertising watchdog upheld a complaint from R3 against a self-styled ‘insolvency advice’ firm – Mark Liddle LLP – who criticised practitioners in an advertorial in a business magazine.

The Association of Business Recovery Professionals (R3) made protests about the advertisement for misrepresenting the work of IPs, implying that practitioners could not advise business owners and were only involved in shutting down companies.

The ASA upheld both complaints and agreed with three other representations from R3, namely:

- A claim that IPs charge “huge fees”, because the advertisement failed to make clear that charges depended on the case and were not all determined by the IP.

- There was an implication that directors’ duties to creditors of their company could be avoided.

- The ad had implied that it was never necessary to use an IP.

In its response to the investigation, Mark Liddle LLP said that it did not believe the interview was an ‘advertorial’, but that it was comment only and represented the views of partner Gemma Laurent.

It claimed her views were subjective and based on her own personal experience and knowledge.

The ad appeared in the Dorset Business Magazine, which was a publication sent to local businesses with an emphasis on news and was also a forum for local businesses to give their views.

The firm therefore said it believed the average reader would be an individual with some level of business sense and would realise that articles published in the magazine were subjective.

In its summary ruling banning the repeat use of the advertisement, the ASA said the advertorial had breached the CAP Code (edition 12) rules 3.1, 3.3 and 3.6 (Misleading advertising), 3.7 (Substantiation), 3.38 (Other comparisons) and 3.42 (Imitation and denigration).

 

 

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