FSA defends its action on adverts

The Financial Services Authority has defended its policy to take action against firms outside the public arena in response to criticism that it isn\'t tough enough on non-compliant financial promotions.

In its financial promotions mortgage and general insurance bulletin for December, the regulator reports that it is cracking down on non-compliant financial promotions in the sub-prime and lifetime mortgage markets, which are still giving it cause for concern.

Those working in the industry say the main perpetrators are small firms with no compliance support advertising in the regional press.

Terry Pritchard, managing director of Chase UK, says: “The FSA needs to look closely at misleading adverts in the regional press, because until it cracks the whip firms that comply can’t compete on a level-playing field.”

Although the FSA’s bulletin has been widely viewed as a step in the right direction, there are still grey areas causing concern. One of these is secured second-charge loan promotions, which are not governed by MCOB rules but still attract consumers looking for a mortgage.