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 our overarching Treating Customers Fairly initiative.
Updates & additions
November 2008
Read the findings of our review into insurance comparison websites
Press release: FSA concludes its review of insurance comparison websites
October 2008
Joint FSA/BCSB statement on raising standards in savings advertising
Key issues for firms to avoid
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.
Key issues for firms to avoid
COBS - and the beat goes on...
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.