Non-compliant advertising on the rise

Research undertaken by Mortgages PLC has revealed an increase in the level of non-compliant mortgage advertising taking place this year.

A detailed review of advertising in popular consumer mortgage magazines was carried out in both April and September 2005. In April, 24% of all mortgage advertising was found to be non-compliant, with the most common issues including the continued use of outdated Consumer Credit Act risk warnings, APRs not being quoted and advertising for adverse credit mortgages not including FSA prescribed risk warnings.

When the research was repeated in September, the results showed the level of non-compliant advertising had increased to 31%. The most common issue was adverts not including an APR when one was required. One advert still carried an old CCA risk warning.

Peter Beaumont, sales & marketing director at Mortgages plc, says: “On first sight, these results indicate that financial advertising is getting worse, but the picture is not that bad when you analyse underlying trends.

“Most of the issues identified in our April research have been sorted out and, although one advert did carry an old risk warning, all of the adverse credit advertising did carry the prescribed FSA wording. APRs are still a problem and advertisers are also failing to give the same prominence to prescribed wording as they do to promotional wording.”

Mortgages plc also confirmed that an increasing number of firms are starting to move away from lead generation focussed advertising, in favour of brand lead advertising. It is believed this may be as a result of falling response rates from traditional advertising and lenders now giving online promotional activity greater prominence in their marketing schedules.

Mortgages plc will update this research in March 2006 to track developments.