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ASA dismisses complaint against ‘deposit alternative’ firm

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  • 04/12/2019
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ASA dismisses complaint against ‘deposit alternative’ firm
Complaints that adverts from a firm offering tenants the chance to avoid handing over a traditional deposit were misleading have been dismissed by the regulator.

 

Concerns were raised with the Advertising Standards Authority (ASA) over marketing from Flatfair, regarding claims that the firm’s services could “keep your property protected” and that landlords could “get up to double the protection of a traditional tenancy deposit”.

The complaints, which were made by rival ZeroDeposit.com, alleged that these claims were misleading and could not be substantiated.

Tenants can subscribe to Flatfair for a one-off fee, equal to one week’s rent plus VAT. When the tenancy ends the landlord calculates any outstanding amount considered to be contractually due from the tenant and notifies them through Flatfair’s portal.

If negotiations don’t lead to an agreed fee, the case is referred to a government-backed deposit dispute resolution scheme, which will arrive at an ‘established charge’ owed. Should the tenant then fail to pay it, Flatfair may purchase the value of the tenant’s debt, up to a maximum of 12 weeks rent.

Flatfair pointed to other text on the ad in question, which included the following: “Tenancy deposits are now capped at five weeks’ rent. Make substantiated end of tenancy charges for up to the value of 12 weeks’ rent through Flatfair”.

The ASA determined that this, combined with the actual terms and conditions of the firm’s service, was “sufficient to substantiate that Flatfair provided ‘protection’ at the level stated in the ad, as landlords were likely to understand it in context”.

As a result, the case was closed, with no further action required.

 

Developer clears up claim

In a separate case, developer Howarth Homes had a complaint informally resolved by the ASA.

The case centred on a newspaper ad for the firm, which included a figure for “guaranteed rental income”.

After a complainant suggested this was misleading, Howarth agreed to amend the claim, though “clarified that they had been prepared to make up the shortfall between actual rent and the guarantee” according to the ASA.

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