• Doing business with the FSA
  • Being regulated
    • Financial promotions
      • Our actions
        • Case work examples

This case work example describes a case we have acted upon. It is designed to help firms understand our analysis, the issues that may lead us to contact firms and the action that may result. It does not set any kind of precedent or guide about the action we may take on similar cases in the future.

Issue

The promotion displayed a headline rate for its mini cash ISA of "up to 5.5% AER". The percentage amount was in a large font (measuring 25mm in the print promotion) and was prominently stated in the promotion. The advertisement also contained the wording, "Minimum deposit to earn rate quoted is £[x]", this was in small print (measuring 2mm) at the bottom of the advertisement, and was substantially higher than the £3000 maximum annual cash investment in an ISA.

We received a number of complaints from consumers who raised concerns that this advertisement was potentially misleading, as consumers are limited to saving a maximum of £3000 in any year into a cash ISA.

We were concerned that the advertisement was potentially unfair, unclear and misleading to consumers. In particular:

• We were concerned that the average consumer would associate the headline rate of 5.5% with their annual allowance of £3000, but in practice this rate would not have been available to consumers with savings below the minimum deposit amount. For this reason, we would have expected either for the promotion to use a different headline rate, or for the minimum deposit requirement to have been given significantly more prominence.
• While consumers would find out the minimum deposit when opening an account, they could easily be unfairly induced to contact the bank after seeing the promotion, and upon discovering that the rate advertised was not available to them, open up a less appropriate account.

Action taken

In response to our concerns, the firm stopped communicating this. In addition, the firm agreed to ensure that this concern was addressed in future campaigns.

Lessons learnt

When considering whether a promotion is fair, clear and not misleading, we would expect firms to consider whether the promotion is "stand alone compliant", i.e. each financial promotion should be fair, clear and not misleading on its own, and should not rely on a subsequent stage of the sales process to remove any misunderstanding.

Headline claims with significant conditions should be avoided unless the conditions are displayed with sufficient prominence to prevent the potential for consumers to be misled.

Back to Examples list