EC rules may put the brakes on TV adverts

ROBERT SINCLAIR: PROBLEMS WITH INTERPRETATION
ROBERT SINCLAIR: PROBLEMS WITH INTERPRETATION

The European mortgage directive would make it impossible for lenders to advertise effectively on television and radio, the European Mortgage Federation claims.

The directive states that there are weaknesses in the regulation of mortgage marketing and more information needs to be provided in advertising campaigns.

Jennifer Johnson, senior adviser at the EMF, says: “The detail lenders would need to provide would be so much that advertising on TV and radio would be impossible.

“It is more appropriate to disclose most of the infor mation at the precontrac tual disclosure stage when the borrower is more foc ussed on taking out the loan.”

She says it would lead to information overload for consumers and be hugely expensive for lenders as advertising slots would need to be lengthy to get all the in formation across.

Robert Sinclair, director of the Association of Mortgage Interme diaries, says: “The directive has a purpose but one of the problems we have
is interpreting it.”

He says some European Union countries have interpreted the marketing rules to mean that when a lender is advertising its services generically and mention they offer mortgages they would need to give details of their range and the risks involved – which would be impossible.

But Sinclair says it is more likely that lenders would only need to include all the product information if they were advertising a specific product.