Eltham-based adviser Tony Joannou, managing director at Money Sage first saw the second in the series of the ‘Hell or Habito’ adverts on Sky 2 and complained to the digital firm, but unsatisfied with the response took his complaint further to the Advertising Standards Authority (ASA) in early February.
The animated TV advert opens with a woman typing the term ‘mortgage broker’ into a search engine and being hit by a green vomit-like tidal wave, including a pizza slice which hits her in the face with the words ‘jargon’ spelt out on the snack.
At the end of the ad, the words pop up: ‘Looking for a mortgage without the jargon? It’s either hell or Habito.’
Joannou wrote to Habito: “The emphasis of the letter was clear, deal with Habito to get a clear and positive service or deal with anyone else and be confused and get a shoddy service.”
He continued: “Well, how about the fact I have been helping people for over 30 years and have testimonials for helping them and making life easy? If your service is so good then it just needs to show your positives, not everyone else as rubbish. There is no need to go down that road.”
He warned the broker to pull the ad or risk a complaint to the ASA.
The ad series went live in late September last year, with the mortgage broker-focused ad running from November to January.
Habito’s founder and CEO Daniel Hegarty said the firm never planned to denigrate the reputation of other mortgage brokers, asserting it wanted to dramatise the fact that for ‘many, many people, the experience of getting a mortgage can be hellish.’
He said: “We see consumer fear as a financial-services industry-wide issue, but one that directly affects mortgage-holders, with real consequences.”
Habito-commissioned research revealed more than half of mortgage holders lose an estimated £15.5bn, or £3,528 per household, after failing to switch their mortgage deals.
Hegarty said: “We know there are many brilliant mortgage brokers out there who act with their clients’ best interests at heart. However, we felt it was important to show those 55% of UK mortgage-holders that, should they relate to the protagonists in our ads, there is another way.”
He said its ad underwent an ‘extensive and rigorous approval process of approval with the ASA and Clearcast prior to airing, adding: “I hope this has gone some way to allay your concerns.”
Joannou wrote to advertising regulator, the ASA asking it to take a look and see if it thought it was acceptable to ‘simply knock an entire market that works very well for its clients.’
The ASA has confirmed that it has received 25 complaints about the ‘Hell or Habito’ ad with the mortgage broker search term, but Joannou’s was the only complaint about its anti-competitive nature.
An ASA spokesperson said: “We have received 24 complaints that the ad is offensive because it is too graphic (woman being covered in a green substance which turned her into a skeleton) and is unsuitable to be shown at a time when it may be seen by children.
“We have carefully considered those complaints but do not consider that the ad breaks our rules and we will not therefore be taking any further action on those grounds.”
ASA said it is assessing Joannou’s complaint to establish if there are any grounds for further action and will reach a decision in the next couple of weeks. It said any decision on the ad would be several weeks after that.
It said: “One complaint could be enough for the ad to be banned. We don’t play a numbers game. If we consider there are grounds to launch an investigation, i.e. there is a potential problem under our rules, a result of that could be that we find the ad breaks our rules and it has to be amended or withdrawn.”
Q&A with Habito CEO and founder Daniel Hegarty
Mortgage Solutions group editor Victoria Hartley asks Habito for its response to the assertion that the ad is taking a pot shot at the intermediary channel.
Q. When the consumer in the ad searches ‘Mortgage broker’ and the screen spews back green bile including a piece of pizza with mortgage jargon on it, shouldn’t the search term have been mortgage, not mortgage broker?
A. 80% of mortgages are advised, and 50% are arranged through an intermediary – in most cases by a mortgage broker, every year in the UK. With this, it felt like a natural starting point for the protagonist in the advert to begin her online search by typing in the words ‘mortgage broker’ into the online search bar. We, ourselves are a ‘mortgage broker’. We have a team of more than 20 mortgage brokers here at Habito – the key differences are that we operate online, are powered by cutting-edge technology that allows for whole-of-market searches to be conducted in seconds and we are free to use.
The point of the ad Mr Joannou is referring to is to take a specific look at industry jargon and stress caused by confusing choices and overwhelming ‘information’. The term ‘Mortgage Broker’, which also counts as jargon, is merely the starting point in the protagonist’s journey. What ensues is a barrage of confusing language and information – namely a dizzying number of options, best buy tables and acronyms such as ‘SVR’ that no one outside of the industry understands. This is heavily dramatised but rooted in truth: our research (conducted among 2,000 UK mortgage-holders in June 2018) found that 58% of people are put off switching on to a better deal because of over-complicated industry jargon.
Working with the linguistics team at the University of Nottingham and the economics department at the University of Manchester in June 2018, we found that every year, this lack of switching is costing more than half of UK households £15.5bn collectively. This needs to change.
Q. If Habito’s intention is to emphasise there is an easier way to get a mortgage, why target mortgage brokers, who are actually the ones trying to simplify the process for the consumer?
A. We are not targeting mortgage brokers. We, ourselves, are a mortgage broker and have no intention of pointing the finger at other intermediaries. We have invested heavily in industry-leading talent and technology because we know that the experience of getting a mortgage for far too many people, is very far from perfect. For us, it’s not just ease, we exist to make the process better, cheaper and less stressful.
Our Hell or Habito adverts exist to dramatise the very real issue that, for too many people, the experience of getting a mortgage is hellish. Our research points to three core areas of stress and tension for customers – money, time and confusion. Furthermore, many of the tensions and problems we have identified are borne out by the Financial Conduct Authority (FCA), which, in its interim mortgage market report, highlighted that the scale of mortgage choice, as well as complexity, are the biggest barriers in helping UK homeowners secure the best deal for them – this is the point of our advertising campaign.
Q. Tony Joannou’s complaint is that Habito is denigrating other industry brokers to make themselves look good, more of an American tactic which doesn’t reflect a UK sense of fair play. What’s your response?
Our ads put the customer front and centre. We exist to help people get the very best deal in the best possible way – for free. Our commitment is to make things better for our customers.
What isn’t fair is that customers feel disempowered by the mortgage application process. This is backed up by the FCA who estimate that 800,000 customers remain on a reversion rate for over six months, despite appearing able to and likely to benefit from switching and could save £1,000 per year by switching. Our research points to both the number of people on their SVR, and the amount they could save by moving away from it, to be much higher. However, the fact remains that whether it is powered by inertia, not being aware, too much choice or just confusion around what best to do – too many people do not feel in control of their mortgage. That needs to change.