According to Steve Walker, managing director of Promise Finance, the ‘lack of passion’ exhibited by the watchdog was having a detrimental effect on both customers and firms trying to work within the rules.
He compared the difference in approach with that taken by the Financial Services Authority (FSA), which has recently been clamping down on misleading advertising in the first charge market.
Walker said: “The OFT is not doing enough to control financial promotions. If you look in Exchange and Mart, others seem so good because they are breaking the rules and that makes it pointless. The OFT needs to have the same degree of passion as the FSA, which has been doing thematic reviews and punishing bad promotions.”
John Webster, CEO of Swift, pointed out the FSA had been slow to enforce rules governing financial promotions but believed the work it is doing now should be copied in the seconds market.
“The FSA took a while to get round to it but the same ought to work in the secured loans market as it does in the mortgage market. It’s not fair if your offering is made to look inferior and I can understand the frustration if you’re doing it right and others aren’t.”
In response, a spokesperson for the OFT insisted it would always act if there was a detrimental impact on the customer.
“If there was an area of detriment then we would look at it but we and the FSA have separate powers and we look at things differently. If there was a misleading advert, the Advertising Standards Authority would look at it as well but we wouldn’t slacken if the ad was misleading.”
