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THE ASA HAVE FOLDED UNDER PRESSURE FROM LLOYDS.

IS THERE NO “AUTHORITY” IN THE UK PREPARED TO STAND UP TO EVIL LLOYDS BANKSTERS?

WE WILL BE APPEALING.

 

 

  • Introduction

 

  1. This letter sets out the bases of my appeal against the decision of the ASA concerning the advertisement procured by the Lloyds Banking Group (“LBG”) with the title “By Your Side” (“the Advertisement”).

 

  1. The adjudication which is the subject of this appeal is dated 26 September (“the Adjudication”). For ease of reference I have set out the Adjudication in full in paragraph C I have done so because the Adjudication is errant in virtually every respect.

 

  • Thegrounds for appeal

 

  1. The ground for appeal is thatthat there are numerous substantial flaws in the Council’s ruling.

 

  1. The primary flaws in the Adjudication are as follows:

 

  1. It neither considers nor takes any account of the actual meaning of the words used in the Advertisement.

 

  1. Deriving from this fundamental flaw is the Council’s errant conclusion that the wording is “mere puffery”.

 

  • The Council came to this conclusion despite the clear admission on the part of the bank that the wording of the Advertisement did make claims which it was obliged to justify.

 

  1. The bank’s justification of the Advertisement however does not address what the actual words used in it mean.

 

  1. The Adjudication also accepts without question factual assertions made by the bank despite the ASA having been furnished with cogent evidence that those assertions were false.

 

  • The Adjudication

 

“AD DESCRIPTION

 

A TV ad for Lloyds Bank, seen on 10 February 2018. The ad showed a black horse galloping through the countryside, past HMS Victory, a memorial service, a suburban neighbourhood where a mother was caring for her baby and a beach with children running behind it.  During the ad a female voice said “Yesterday, today, and tomorrow we have been and always will be by your side.”  At the end of the ad text stated “By your side for over 250 years.”  Music in the background included the lyrics “We’ve come a long, long way together, through the hard times and the good.”

 

ISSUE

 

Keystone Law, who represented victims of financial fraud committed at a corporate branch of Lloyds-owned HBOS and objected to the actions Lloyds Bank had taken to address it, challenged whether the ad was misleading.

 

            RESPONSE

 

Lloyds Banking Group plc t/a Lloyds Bank said that the “By your side” claim had been used in their ads since 2015.  They said “By your side” was an encapsulation of the services they provided and that both the voiceover and on-screen text supported that sentiment.

                                                                                                    

Lloyds Bank said the claim “By your side” was meant as a summation of the reliability, accessibility and security provided to customers. They believed that the only claim that required objective substantiation was the longevity of the business, substantiated by means of the original ledger that showed the start date of Lloyds Bank in 1765.

 

Lloyds Bank said the ad had not promoted a specific product or service and therefore could be neither misleading nor have omitted information that consumers may have needed to make a decision. They said that there was no call to action for the consumer, no direction to call a phone number or visit a website so the ad could not be, by that definition, misleading.

 

Lloyds said that, in any case, the ad could be substantiated based on the size of their banking network, the variety of services they offered, their customer base, its volunteering efforts, the average number of customer interactions per customer per month, and other initiatives they had launched.

 

Lloyds Bank said that in January 2017 two former HBOS employees had been convicted for criminal actions alongside four other individuals in relation to criminal misconduct at the HBOS Impaired Assets London and South office based in Reading.  They said the convictions related to criminal conduct prior to the acquisition of HBOS by Lloyds Banking Group (LBG) in 2009.  They said that, following the convictions, LBG launched a customer review, overseen by an Independent Reviewer to determine what compensation was due to the victims of that fraud.  They said there were approximately 70 companies/businesses which Lloyds Bank believed were impacted by the fraud. They said the proportion of companies/businesses impacted by the crimes was equivalent to less than 0.001% of their 1.1 million business customer base.

 

Lloyds Bank said they had made progress settling with affected companies/businesses and, that of those within the review, more than 90% had received compensation of which 85% accepted.  They said that throughout their review they covered the fees for lawyers or other advisers for customers so they had access to appropriate advice.

 

Lloyds Bank said the complaint was in respect of whether a retail consumer ad was misleading. They said the ad had been designed, created and used for a Lloyds retail bank consumer audience.

 

Clearcast said they were not made aware of the HBOS Reading case prior to approval of the ad but that they understood some employees at a corporate branch of HBOS (now owned by Lloyds Bank) had been found guilty of fraud.  They said they did not agree that the matters arising from the fraud case should be conflated with the strap line “By your side”.

 

Clearcast said that when assessing the claim “By your side for more than 250 years”, they asked for substantiation of the 250 year claim and a rationale for the use of “By your side”.  They said they were satisfied that viewers would infer the message was related to reliable, accessible and secure banking. They said they understood that since the individuals responsible for the crimes were prosecuted, Lloyds Bank had implemented measures to ensure appropriate action had been taken, which to Clearcast’s mind had reinforced the ad’s claim.

 

ASSESSMENT

 

Not upheld

 

The ASA understood that in 2017 six people, including two former HBOS bankers, were found guilty of bribery and fraud against business customers and shareholders from 2002-2007.  The complainant believed the claim “By your side” in the ad was misleading because they believed Lloyds, who took over HBOS in 2009, had not supported or been “by the side” of their clients and other victims of the HBOS fraud.

 

The female voice-over stated “Yesterday, today, and tomorrow we have been and always will be by your side”, while on-screen text stated “By your side for over 250 years”.  The ad did not reference the HBOS fraud case or steps it had taken regarding compensating victims of fraud in general.

 

We considered viewers would understand the ad to be a general brand promotion, and would understand the claim “By your side” to be advertising puffery, not a claim that would be taken literally, or be seen as requiring objective substantiation.  We did not consider that viewers would interpret the claim “By your side” to be a commentary on the situation of the victims of the HBOS fraud case, or to think that was directly connected to their engagement with Lloyds bank in 2018.  Further, in the context of a general brand promotional ad with no references to fraud, we did not consider the details of the HBOS fraud case to be material information that needed to be included in the ad to prevent consumers from being misled. For those reasons, we concluded the ad was unlikely to mislead.

 

We investigated under BCAP Code rules 3.1, 3.2 and 3.4 (Misleading advertising) but did not find it in breach.

 

ACTION

 

No further action necessary.”

 

  • The relevant provisions of BCAP Code (“the Code”)

 

  1. Paragraph 3.1 of the Code states that:

 

“Advertisements must not materially mislead or be likely to do so.”

 

“Advertisements must not mislead consumers by omitting material information.  They must not mislead by hiding material information…”

 

“Material information is information that consumers need in context to make informed decisions about whether or how to buy a product or service.  Whether the omission or presentation of material information is likely to mislead consumers depends on the context, a medium, and, if the medium of the Advertisement is constrained by time or space, the measures that the advertiser takes to make that information available to consumers by other means”.

 

  1. Paragraph 3.4 of the Code provides that: “Obvious exaggerations (‘puffery’) and claims that the average consumer who sees the Advertisement is unlikely to take literally are allowed provided they do not materially mislead.”

 

  1. Paragraph 3.5 of the Code provides that: “Subjective claims must not mislead the audience; advertisements must not imply that expressions of opinion are objective claims.

 

  1. Paragraph 3.10 of the Code provides that: “Advertisements must state significant limitations and qualifications…”

 

  1. Paragraph 3.12 of the Code provides that: “Advertisements must not mislead by exaggerating the capability or performance of a product or service.”

 

  1. As I set out below, the Advertisement infringes each of these elements of the Code.

 

  • The claims made in the Advertisement

 

  1. The Advertisement makes two distinct but overlapping claims:

 

  1. “Yesterday, today and tomorrow we have been and always will be by your side.” (emphasis added) (Claim 1);

 

  1. By your sidefor over 250 years.(emphasis added) (Claim 1);

 

  • “We’ve come a long, long way together, through the hard times and the good.” (Claim 2).

 

  1. As to Claim 1; the dictionary definition of the term “by someone’s side”is; “close to someone, especially so as to give them comfort or moral support”. That is the positive assertion made in the first part of the Advertisement which Lloyds Bank must substantiate concerning (at least) its first two elements.

 

  1. Claim 2is made in the second part of the Advertisement, which is that Lloyds Bank has maintained a supportive attitude towards its customers “through the hard times and the good”. This too is a positive assertion which must be substantiated by the bank.

 

  1. It is evident from the Adjudication that the bank has conspicuously failed to substantiate either of the Claims. By contrast I have provided overwhelming evidence to the ASA that the bank has been cruel and mendacious to a substantial number of his customers over a period of several years.

 

  1. It inevitably follows that the bank should no longer be permitted to deploy the Advertisement.

 

  • The justifications offered by Lloyds Bank for the claims made in the Advertisement

 

  1. The bank’s first justification is that the Advertisement “had been used in their ads since 2015”. The fact that this is the third year that the Advertisement has been used is irrelevant to this complaint; save that it means that the ASA should expedite its decision to ban the Advertisement.

 

  1. The bank also claimed that “By your side”was “meant as a summation of the reliability, accessibility and security provided to customer”. The difficulty with this assertion made by the is that it is inconsistent with the meaning actual words used in the Advertisement.  It cannot therefore serve as a justification for its continued use.

 

  1. The bank goes on to say that it believes “that the only claim that required objective substantiation was the longevity of the business, substantiated by means of the original ledger that showed the start date of Lloyds Bank in 1765”.This is nonsense.  The Advertisement is not just a claim that the bank has been in business since 1765; it is a claim that the bank [has]been and always will be by[the] side [of its customers and prospective customers watching the Advertisement]. That is a false claim.

 

  1. The bank goes on to claim that the Advertisement “has not promoted a specific product or service and therefore could be neither misleading nor have omitted information that consumers may have needed to make a decision”. This too is absurd.  The Advertisement promotes the products and services of Lloyds Bank as a whole.  It seeks to persuade customers and prospective customers of the bank that they can rest assured that they will be treated fairly and humanely by the bank. However, I have sent to the ASA a plethora of evidence to the contrary.

 

  1. The bank’s next point is similarly unsustainable; “They said that there was no call to action for the consumer, no directions to call a phone number or visit a website so the ad could not be, by that definition, misleading”. It is the claims made by Lloyds about their products and services which is misleading; the fact that there is no invitation to the consumers to take specific action is wholly irrelevant.  The clear purpose of the Advertisement is to persuade existing customers of the bank not to seek financial services elsewhere; and non-customers of the bank to purchase its products or services.

 

  1. The bank goes on to claim that the Advertisement can be substantiated on the following bases:

 

  1. “the size of their banking network”;

 

  1. “the variety of services they offered”;

 

  • “their customer base”;

 

  1. “its volunteering efforts”;

 

  1. “the average number of customer interactions per customer per month”; and

 

  1. “other initiatives that they had launched”.

 

  1. The Advertisement however makes no claims about any of these aspects of the bank. It is not claimed that it is a big bank, with a large customer base, with a substantial number of customer interactions, or that its members engage in volunteering (which in any event is likely to concern non-customers of the bank and therefore irrelevant for that reason).  Nor does it make any reference to “initiatives”launched by the bank.  None of these factual assertions are relevant to whether or not the Advertisement is or is not misleading.

 

  • The false claims made by Lloyds about the criminal activity within its ranks

 

  1. The first point to be made about Lloyds’ claims on this issue is that they cannot and should not be believed. I have sent to the bank a copy of the Project Lord Turnbull Report.  This makes clear that Lloyds has engaged in a long-term campaign of deceit and cover up concerning criminal activity within its ranks.  Until the conviction in January 2017 of Lynden Scourfield and Mark Dobson for offences of dishonesty, the bank had vigorously and mendaciously denied any knowledge of criminal activity on their part, or otherwise within its ranks.

 

  1. Those claims have been proved to be false by (inter alia) the Project Lord Turnbull Report, a copy of which was supplied to the ASA. Both Lynden Scourfield and Mark Dobson were dismissed for gross misconduct.  Does the bank seriously expect the ASA to believe that as part of the investigation which led to their dismissal no element of criminality was uncovered?  The bank therefore has a proven record of mendacity on this issue, and therefore any claims that it now makes must be (at least) treated with immense caution.

 

  1. The attempt by LBG (which as the adjudicator states is the subject of this complaint) to exculpate itself by making the point that the two jailed individuals were HBOS bank managers, and their activities occurred prior to the merger is also unsustainable. This is not least because both the Bank of Scotland and Halifax brands appear prominently on the LBG website.

 

  1. The products and services which are being lauded by the Advertisement include those from all parts of LBG; including HBOS and BOS. The Advertisement claims that LBG has been “by the side” of its customers for 250 years.  HBOS (i.e. Halifax and Bank of Scotland) is part of that group.  If the intention of LBG is to make this claim solely about the Lloyds’ element of LBG, then the Advertisement should have been qualified accordingly.

 

  1. As to Lloyds’ claim that “there were approximately 70 companies’ businesses… impacted by the fraud”; I respond as follows:

 

  1. Even if the figure of 70 companies/businesses were correct (which is provably false in any event), then the ASA must take account of the true impact of these frauds. When just one business is destroyed the collateral victims are legion:

 

  1. There will be all the employees whose livelihoods have been lost;

 

  1. There will be therefore spouses, children, dependants etc all of whom will have been impacted thereby;

 

  1. Those companies may themselves collapse as a consequence, with the inevitable sequelae I describe above;

 

  1. This may in turn impact communities – as evidenced by the BBC Countryfilewhich was broadcast on 16 September;

 

  1. In my own practice alone, dealing with over a dozen Lloyds fraud victims; one dropped dead at the age of 41 having been brutalised by a Lloyds’ employee, watched his company collapse, and for whom the strain just proved too much. When the ambulance arrived his teenage son was attempting to give him CPR. He left a penniless wife and family.

 

  1. Another of my client (Noel Edmonds) attempted suicide in 2005 by downing a bottle of vodka and a jar of sleeping pills. The only reason why his life was spared was that unbeknown to him, the sleeping pills in question were the sole variety which would not kill an individual by means of an overdose.

 

  1. In Noel Edmond’s case some 200 employees lost their jobs, and inevitably their families/dependents suffered. Other businesses trading with Noel Edmond’s businesses will also have been collateral fraud victims.

 

  1. The true figure however for those which have been impacted by unlawful and/or unprincipled and/or inhumane activity on the part of Lloyds is vastly more than“70 companies/business”.

 

  • You should also bear in mind the letter which was sent recently by the APPG to Police Scotland:

 

“I wish to write to you formally as Co-Chairman of the All-Party Parliamentary Group on Fair Business Banking, to outline the concerns of the Group over the conduct of senior executives at HBOS and Lloyds Banking Group in relation to the HBOS Reading Fraud.

The bank commissioned its own investigation into this matter and the findings were presented to its senior management in the Project Lord Turnbull Report. The report indicates that the board was well aware of the fraud as early as 2008, and senior managers and directors of both HBOS and Lloyds Banking Group then concealed that knowledge for some 8 years. This conduct appears to have been made worse by the report itself, having been concealed from a number of the bank’s directors, including its Chairman.

The Project Lord Turnbull Report states that:

The strategy since January 2007, and possibly from 2005, has been to conceal the Reading incident…deliberate non-disclosure of the Reading incident in the 2007 financial statements fundamentally added to the crime, and from that point on the deceit escalated as the financial crisis deepened…all those involved have condoned criminality and injustice

The Report makes further, and substantive, allegations that Lloyds Banking Group concealed a hole in the accounts of HBOS of nearly £40bn as well as the £1bn fraud. As a consequence, the bank was able to progress with a rights issue of several billion pounds.

In addition to the analysis within the bank’s own report, the APPG has received evidence and statements that specifically refer to the fact that the fraud was not only known about, but was actively concealed, and that this concealment was directed from the head office in Scotland.

Because the APPG has been provided with evidence and statements from a variety of sources indicating that the fraud in Reading was not only known about, but also concealed at board level in Scotland, and because this supports the bank’s own internal investigation, the APPG would suggest that the concealment, which has added and compounded years of suffering onto [fraud victims], should be investigated forthwith by your force.”

 

  1. That letter makes clear the actions of the bank which lead to such widespread despair and loss were at very least concealed by the bank’s most senior management. The direct result of this being “added and compounded years of suffering” for fraud victims.

 

  1. The impact of the bank’s wrongdoing by no means ended there. As the ASA will be aware, Lloyds shareholders successfully sued Lloyds management over losses which those shareholders suffered as a consequence of the rights issue which lead to the Lloyds takeover of HBOS. They too then suffered distress and financial loss directly at the hands of the bank.

 

  1. The ASA has also apparently not asked the bank – as it plainly should – for a full record of all those who have complained that they have been the victims of unfair, inhumane and/or unethical activity by the bank. This clearly should be a factor in assessing whether the claims made by the bank in the Advertisement are true.

 

  • The best evidence about what the bank still mendaciously described as the “Reading Incident” is that the number is at least in the thousands rather than in the tens or in the hundreds. Because of the concerted campaign of cover up and secrecy of which Lloyds is undoubtedly guilty, and in which its senior management was complicit, the true number will probably never be known.

 

  • I am able to inform the ASA that according to what I was told by the senior investigating officer of Operation Hornet, which brought the prosecutions which lead to the jailing of two HBOS managers, that the trial had merely addressed “the tip of the tip of the iceberg” of criminal activities at Lloyds. As the bank well knows, but doubtless has not told the ASA, operation Hornet is very much still underway and further prosecutions will almost inevitably follow.

 

  1. However, the destruction of swaths of SME’s not only impacts those directly and indirectly involved. It also impacts the whole country.  SMEs account for 90% of the income/jobs etc in UK commerce.  The bank of England has estimated that the total loss to the country as a whole by the destruction of SME’s by large banks such as Lloyds (though not exclusively Lloyds) amounts to £1.25 trillion.  To put this in context, that was approximately the value of North Sea Oil.

 

  1. These facts set in context the claim made by Lloyds that “the proportion of companies/businesses impacted by crimes was equivalent to less than .001% of their 1.1 million business customer base”. The bank appears to consider it therefore acceptable to run an advertisement with “by your side” claims even if this has ruined the lives of thousands of individuals in a cynical campaign for greater profit.  However, the true figure is vastly greater than what is claimed by LBG, and the impact of their actions has impacted a vast number of individuals, and the nation as a whole.

 

  • The conduct of Lloyds towards fraud victims

 

  1. I have sent to the ASA a series of compelling documents which establish beyond any doubt that the manner in which the bank has treated fraud victims has been appalling. As is now clear this treatment was meted out to Lloyds fraud victims at the behest of the bank’s senior management. It is only Lloyds which takes a different view about its treatment of those it has robbed and abused.

 

  1. It follows then that after first overseeing (as was inevitably the case) the frauds committed against individuals, the bank then set about denying them, it then set about covering them up.It was then finally forced to put in place a compensation scheme, which has been universally criticised as being grossly unfair. Lord Blackwell, the bank’s own chairman, pledged at an AGM to ensure that fraud victims received financial compensation.  The bank has apparently produced no evidence to rebut the informed assertion that I have made as part of this complaint, that in fact it has paid no financial compensation to a single fraud victim client.

 

  1. The bank has also falsely claimed to the ASA that they covered “the fees for lawyers or other advisersfor customers so they had access to appropriate advice” (emphasis added). As I have also submitted to the ASA, and which the bank has apparently been unable to refute; notwithstanding the bank having pledged in April 2017 to provide funding for “financial advice”, to my informed knowledge it has provided no funding whatsoever for this vital form of advice, without which no compelling claim for financial loss can be made.  It is obviously done so to achieve the desired outcome (which it has done successfully) that no fraud victim has received any financial compensation.

 

  1. As the point made by the bank that 85% of the 90% of those that had been offered compensation had accepted those offers;

 

  1. Many of those who have accepted offers of settlement via the Griggs Review consider that the sums that were offered to have been grossly inadequate – especially because they did not include any element of financial compensation.

 

  1. They could not access the expertise to assess the exact value of their claims because contrary to its pledge to fraud victims the bank would not fund such expertise.

 

  • They could not assess whether they had legal claims because the bank would not disclose information or documents to them.

 

  1. They could not pursue legal claims because those claims were time-barred.

 

  1. Even if they were not then the victims were too poor, weary or broken to take on the financial might of the bank; which it routinely deploys to see off meritorious claims.

 

  • The target audience for the Advertisement

 

  1. The bank makes this claim about the target audience for the Advertisement; “Lloyds Bank said the complaint was in respect of whether a retail consumer ad was misleading. They said the ad had been designed, created and used for a Lloyds retail bank consumer audience”.

 

  1. There is however no element of the Advertisement which provides any justification for the bank’s claim that the Advertisement is limited in its reach to retail customers. I attended a meeting with the SME Alliance on 18 September where one of the complaints made was that the SME victims of Lloyds found the Advertisement offensive.  The Advertisement plainly makes claims concerning the Lloyds Bank products and services as a whole; rather than just to consumers.

 

  • The Clearcast assessment

 

  1. The Clearcast assessment is plainly wrong for all the reasons set out above.

 

  1. It should therefore be disregarded in assessing whether the Advertisement infringes the BCAP Code.

 

  • The Code applied

 

  1. Paragraph 3.1 of the Code states that:

 

“Advertisements must not materially mislead or be likely to do so.” 

 

“Advertisements must not mislead consumers by omitting material information.  They must not mislead by hiding material information…”

 

“Material information is information that consumers need in context to make informed decisions about whether or how to buy a product or service.  Whether the omission or presentation of material information is likely to mislead consumers depends on the context, a medium, and, if the medium of the Advertisement is constrained by time or space, the measures that the advertiser takes to make that information available to consumers by other means”.

 

  1. There is nothing in the Advertisement, and so far as I know nothing on the LBG website, which says anything about (inter alia):

 

  • The continuing investigation via Operation Hornet of criminality within Lloyds;

 

  • The content and significance of the Project Lord Turnbull Report;

 

  • The brutal treatment by the bank of its author;

 

  • The damning and universal criticism of the Griggs Review;

 

  • The failure by the bank to comply with the assurance given by Lord Blackwell at last year’s AGM that fraud victims would be compensated within “weeks”;

 

  • The failure by the bank to comply with the assurance given by Lord Blackwell at last year’s AGM that fraud victims would be compensated for financial losses;

 

  • The refusal by the bank to honour its pledge to fund financial advice to fraud victims;

 

  • The refusal by the bank to admit that for years it covered up criminal wrongdoing in its ranks, choosing rather to add insult to injury by then pursuing them for debts that were incurred as a result of wrongdoing by their own employees.

 

  1. Paragraph 3.4 of the Code provides that: “Obvious exaggerations (‘puffery’) and claims that the average consumer who sees the Advertisement is unlikely to take literally are allowed provided they do not materially mislead.”

 

  1. The Advertisement makes claims about Lloyd’s products and services which are clearly meant to be taken seriously with the result that all those seeing it are being materially misled.

 

  1. Paragraph 3.5 of the Code provides that: “Subjective claims must not mislead the audience; advertisements must not imply that expressions of opinion are objective claims.”

 

  1. To the extent – if at all – the Claims made by the bank via the Advertisement are subjective, they mislead the audience.

 

  1. Paragraph 3.10 of the Code provides that: “Advertisements must state significant limitations and qualifications…”

 

  1. The Advertisement should at very least be qualified to take account of the fact that there have been at least thousands whose lives have been ruined by the cynical and brutal avarice of the bank.

 

  1. Paragraph 3.12 of the Code provides that: “Advertisements must not mislead by exaggerating the capability or performance of a product or service.”

 

  1. The two Claims by the bank that it is “by the side” of its customers “yesterday, today and tomorrow”; and – bearing in mind that it is aimed at those of an adult age – and as have been over recent years – is unsustainable in the face of the overwhelming evidence to the contrary.

 

  • Conclusion

 

  1. For the litany of reasons set out above Adjudication is wrong in every material respect.

 

  1. The Advertisement sets out to mislead the general public as a whole about the nature of the services and products which are offered by Lloyds to existing and prospective customers. It is grossly misleading, as indeed (and as I have provided as part of my evidence to the ASA) is the view taken by the general public by means of an opinion poll; the vast majority of whom considered the Advertisement should no longer be permitted to be deployed by Lloyds.

 

  1. For all of these reasons, the Adjudication is aberrant, inconsistent with public opinion, and manifestly wrong. It should therefore be reversed on appeal.

 

Yours sincerely,

 

Jonathan Coad

Consultant Solicitor

Keystone Law