A study by the FSCP revealed 47 per cent of mortgage promotions they researched were non-compliant. Undertaking a review of national press advertising on 11 February 2006, across mortgage, general insurance and investment promotions revealed over half of Financial Promotions reviewed did not comply with Financial Services Authority (FSA) rulings.
Of the mortgage promotions, 5 per cent were classed as high risk, with 36 per cent considered medium risk. 6 per cent were classed as low risk.
The findings revealed 10 per cent of all Financial Promotions reviewed failed to meet the requirements of being clear, fair and not misleading. Breaches included; failing to provide an APR aimed at non-status borrowers and failure to provide correct risk warnings, which were both considered high risk regualtion breaches.
John Howard, chairman of the FSCP, said: “It is a quirk of the set up that financial advertising is not covered by the Advertising Standards Authority (ASA), and so consumers seem to get a worse deal, with the FSA offering no public scrutiny and pressure to make sure advertisers keep to the rules in an area where it is all too easy to blind the consumer with seeming good news headlines. We would like this part of the FSA’s work to open up with naming and shaming of the worst offenders.”
Bill Warren, director at Complete Mortgage and Loans Services, said: “The FSA should name and shame if only to kill of the moans and groans of firms who are trying to do the right thing.” MI is continuing its campaign to ‘promote the standards of Financial Promotions’, a cause Warren felt was warrented.
“The rules aren’t easy to interpret and the regulator knows this, but last month the FSA and the Office of Fair Trading (OFT) announced they will be working together, so it’ll be clearer who does what.”
