Advertising on the website for KBC Bank Ireland offered the following:
If you’re looking to move to a new home, we have the mortgage options to suit you. With LTV based tiered rates and a comprehensive range of mover options, KBC is well placed to cater for your next big move.
Our Mover Mortgage features include:
•One year FREE KBC Home Insurance if you draw down on a residential mortgage before 30th June 2014**
•Up to 90% finance
•Loan terms of up to 30 years
•Approval in Principle in Minutes*
•A competitive range of fixed and variable rates
•A range of flexible mortgage options…
** This offer excludes Buy to Let properties. The offer applies to residential mortgage applications that draw down between the 1st Feb and up to and including 31st July…”
The complainant said that while initially the offer for free home insurance with every home mortgage drawn was available up to 30th June, the offer was then extended for mortgages drawn before 31st July. There were no other stipulations applicable to the offer. The complainant said that she was partly interested in applying for a mortgage with KBC Bank due to the offer of free home insurance for a year.
Several weeks into her mortgage application the complainant was informed that the bank would not grant her mortgage approval unless she took out home insurance to cover subsidence on her property. This led to her having to take out home insurance with another provider as the company the advertisers were offering insurance from did not cover subsidence and they were not prepared to offer an alternative. She considered therefore that the offer from KBC Bank was not fit for its purpose.
The advertisers said that they had partnered with Zurich for the provision of Home Insurance products and all policies were underwritten and provided by them. They said that the offer for free Home Insurance, like all standard Home Insurance applications with insurance companies, was subject to Zurich’s underwriting criteria, terms and conditions and this fact had been referenced on the Home Insurance section of their website.
To make the offer explicitly clear, however, they said they had now also made reference to this fact on the Mortgage section of their site with the following information:
“The offer for KBC Home Insurance is subject to Zurich underwriting criteria, terms and conditions.”
The Complaints Committee considered the detail of the complaint and the advertisers’ response. The Committee accepted that insurance products were subject to underwriting criteria, terms and conditions and they noted the changes which the advertisers had made to the Mortgage section of their website to highlight the fact from the outset that the free Home Insurance offer was subject to Zurich underwriting criteria, terms and conditions. They considered, however, that this information should have been originally referenced in the advertising. The Committee considered that the advertising should also have referred to the fact that the offer was subject to the lenders’ terms and conditions. The Committee upheld the complaint under Sections 2.22, 2.24 and 3.16 of the Code.
The advertising should be amended to include a reference to the offer being subject to the lenders’ terms as well as those of the insurance provider. A link should be provided for both terms so consumers can access them easily.