Financial promotions
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The standard of financial promotions is a priority element of the FSA's retail market strategy and our work in this area is part of the FSA's overarching Treating Customers Fairly initiative.
Updates & additions
June 2008
New case studies on mortgage advertising [PDF]
May 2008
We have updated the section on Questions for firms to ask themselves.
We have just published our review into general insurance comparison websites.
Read our examples of good and poor practice in the car insurance comparison website market.
Key issues for firms to avoid
April 2008
Misleading headline claims, small print, key risks not prominent enough, insufficient product information, unrealistic impressions of the product, cherry-picked or too-prominent past performance data, misleading savings claims, anything which might create an unrealistic expectation on the part of the consumer.
So promotions must be balanced, clear and not misleading.
Article for MoneyMarketing - 8 May 2008
What does 'balance', 'understandability', 'past performance' and 'direct offer' have to do with Cockney Rebel, The Beatles, Joni Mitchell and Tina Turner?
Find out more in our article on how firms are responding to the new COBS Sourcebook.
Recent enforcement action
In the fourth quarter of 2007 we fined one firm £10,500 and publicly censured another.
We took enforcement action in 13 cases in the last 3 years, with total fines exceeding £1.5m
Example casework
Qualified risk warning in a unit trust
A firm issued a promotion for a global unit trust. The promotion contained a standard risk warning, which was appropriate for the product.
However, the promotion also noted that [irrespective of the risk warning] the fund aimed to generate above average returns over a prolonged period.
Our view was that this constituted a qualification of the risk warning, which reduced the impact that the warning should have had.
Action taken: the firm agreed to immediately withdraw and amend the promotion.
See more examples of our casework.
Mortgages and secured loans
Essential reading if you advertise:
-
FSA-regulated mortgage contracts; or
- other secured lending, where the lender has our permission to offer regulated mortgage contracts.
So this could include buy-to-let mortgages and
second or subsequent charges (for example, to consolidate credit/store card debts) etc.
Together, these are known as qualifying credit.
We regulate all adverts for qualifying credit, even if the advertiser only has a consumer credit licence from the Office of Fair Trading.