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Regina
v Paul Munford and Marc Ahearne
Munford and Ahearne traded as 'The Mortgage Centre' in
Neasden. In 1991, they placed a number of advertisements in a local newspapers.
Prosecutions were brought over four of the advertisements, and the defendants
were tried in the Crown Court on 12 indictments. These included inadequate
quotations (found guilty and not the subject of this appeal), the inclusion of
false or misleading information in the advertisements, and insufficient
prominence given to the APR and the "security risks" warning
statement. They appealed on the basis that the advertisements were
not covered by the legislation so the convictions were wrong in law. Lord
Justice Hobhouse gave judgement (paraphrased) as follows:
The defendants' business was that of credit brokers within section 145
of the Consumer Credit Act 1974 which includes: "the effecting of
introductions, in the case of an individual desiring to obtain credit to finance
the acquisition or provision of a dwelling occupied or to be occupied by himself
or his relative, to any person carrying on a business in the course of which he
provides credit secured on land." Part IV of the Act deals with mortgage advertisements and
s.43(1)(a) states: "This Part applies to any advertisement, published for
the purposes of a business carried on by the advertiser, indicating that he is
willing ... to provide credit." The question is thus whether the advertisement is
published for the purpose of a business carried on by the advertiser, and it
indicates that he (the advertiser) is willing to provide credit. The
corresponding provision with regard to credit brokers is section 151(1):
"Sections 44 to 47 apply to an advertisement published for the purposes of
a business of credit brokerage carried on by any person, whether it advertises
the services of that person or the services of persons to whom he effects
introductions, as they apply to advertisements to which Part IV applies." Section 189 defines "advertiser" as: "in
relation to an advertisement, means any person indicated by the advertisement as
willing to enter into transactions to which the advertisement relates ..." Therefore the relevant considerations are to look at the
advertisement and ascertain what it indicates. That view was underlined in
Jenkins v Lombard North Central (1984) which decided that the matter must be
judged by looking at the advertisement itself, and not through extraneous
knowledge.
Turning to the advertisements in question, they clearly state that the
advertiser (The Mortgage Centre) is willing to provide credit ie. ·
"MORTGAGES. NOW IS THE TIME TO BUY. With our special
rates and unlimited funds, we can offer first-time buyers unique help with our
new low rate of 9.9% (APR 10.7%) ... Written quotations on request. Licensed
credit brokers", and including the security risks warning; ·
"Mortgages. Reduce your mortgage payments. Discount
rates for first-time buyers. Special low-start interest schemes. Non-status
mortgages. Remortgages to release capital ..." and including the security
risks warning and "Written quotations on request".
Therefore all the advertisements are clearly advertisements falling
within section 43. Further, the advertiser for the purpose of section 189 is
clearly The Mortgage Centre. They also fall within section 151 since they were
inserted for the purposes of a business of credit brokerage carried on by the
appellants. It was advanced by the defendants at the trial that,
because the loans which they advertised were to be provided by Capital Home
Loans, that the advertisement was not caught by the Act because it did not
identify the actual source of the loan as being from Capital Home Loans. But
these advertisements already fall within sections 43(1) and 151, so whether the
indication was misleading was a matter of fact for the jury. It is also suggested that, relating to the counts which
depend on the Consumer Credit (Advertisements) Regulations 1989, these
advertisements were not covered. Regulations 1 and 2 make advertisements covered
by sections 43 or 151 subject to the Regulations. These advertisements do offer credit, therefore they
could not be simple credit advertisements, but must be at least intermediate,
with appropriate prominence given to APR and security risks warning.
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