The campaign is designed to work towards an industry standard user guide for Financial Promotions. While industry figures acknowledge FSA rules and guidelines on the matter, there is an increasing underbelly of frustration at the volume of non-compliant advertisements still in the market and the lack of FSA action over this issue.
Compliance and marketing experts have inundated MI with suggestions to help define FSA rules via a number of templates and ultimately an industry standard user guide with the intention of ironing out grey areas of interpretation.
Thomas Reeh, chief executive officer at blackandwhite.co.uk, said: “An industry standard user guide, in association with FSA rules, is a great idea as it will help cut out interpretation and ultimately work towards a level playing field. Let’s be honest, marketers are pushing the boundaries because they are still getting away with it and steps need to be taken.”
Julian Wells, head of marketing at Mortgages plc, said: “It’s not about rewriting the FSA rules; it’s just about defining them into a clearer user guide. We produce our own marketing guide but an across-the-board standard with specific templates would be highly beneficial to smaller brokers.”
Andy Frankish, managing director at Mortgage Talk, also gave his support. “The industry needs clearly defined guidelines and standardised templates. It’s a challenge for the industry and the FSA to find something that works as the lack of action and massive numbers of non-compliant ads still out there suggest that, thus far, the current rules haven’t.”
As part of a second Financial Promotions review, the Regulatory Alliance of Mortgage Packagers (RAMP) has found that 65 per cent of mortgage Financial Promotions placed by brokers in various high-street mortgage magazines still did not conform to the minimum standards set down by the FSA’s MCOB rules, ten months after ‘Mortgage Day’. A similar problem was highlighted with websites where there was widespread disregard for working within the guidelines.
The majority of non-compliant adverts reviewed had more than one non-compliant feature and there were several common errors including no APR when one is required; broker fees not being transparent; risk warnings not being applied correctly; reference to the defunct Mortgage Code Compliance Board; incorrect use of the word ‘independent’ and fee charging wording; unofficial use of the FSA logo; and large amounts of small print and lack of prominence to mandatory disclosures.
Nick Battersby, compliance director at RAMP, said intermediaries breaching the rules are prospering at the expense of firms trying to get things right. “An industry standard user guide sounds a useful exercise and certainly is an area that will be of wide appeal. Maybe it is time that the FSA considers making changes to the rules that don’t seem to be working.”
Paul Hunt, head of marketing at Platform, commented: “We would be happy to work with the regulator and trade bodies on this issue and we would support such an initiative.”
AMI has already stated that it is in the midst of producing further guidance in the area of non-compliant Financial Promotions.
Tony Jones, managing director of Pink Home Loans, and Bill Warren, director of The Complete Network, have thrown their weight behind the campaign both proclaiming that the idea of an industry standard is a “good idea and a feasible one”.
David Whitely, spokesperson at the FSA, would not be drawn on the possibility of an industry standard user guide explaining that the regulator doesn’t want to get too prescriptive. He said: “Rules are there for all to see and follow. Firms using non-compliant adverts will be subject to the full weight of FSA enforcement.”
