AMI to publish factsheet on sub-prime advertising

The Association of Mortgage Intermediaries is publishing a factsheet on fin- ancial promotions for sub-prime products.

The factsheet is intended to give an overview of the most common errors in sub-prime promotions and how these can be avoided to help create compliant financial advertisements.

AMI says that now the Financial Services Authority has made its intentions clear, it’s time for firms to use the information available to ensure they are aware of the rules and remain compliant in this area.

Rob Griffiths, associate director at AMI, says: “Financial promotions in the sub-prime market is one of the areas the FSA is planning to focus on. This factsheet aims to make members aware of the common errors on adverts such as not adding risk warnings or highlighting extra fees.”

He adds: “The FSA is keen for the industry to make it aware of potentially non-compliant promotions. Some 52% of reports to its financial promotions hotline come from other firms and 59% of all reports relate to mortgages.”

Terry Pritchard, managing director of Chase UK, welcomes the AMI factsheet initiative but says more remains to be done.

He says: “This is a big problem. There are so many adverts in newspapers that are not compliant that we can’t keep up. We can’t compete because companies are advertising with information such as unrealistic APRs.

“I’m pleased AMI is doing something but the FSA must look at smaller companies that don’t have compliance teams. Big ones like us are fine but smaller ones that advertise in the regional press and local magazines must be tackled.”

Julian Wells, head of marketing at Mortgages PLC, has analysed how compliant financial adverts are in the mortgage industry.

He says: “We welcome anything that helps raise the awareness of financial promotions and this initiative is a positive development.”

See Analysis, and Analysis(2)