Companies that advertise sub-prime products on the internet could be in the firing line from the Financial Services Authority for failing to comply with regulations.Speaking at the Mortgage Business Expo at Earls Court in London, Chris Atkinson, manager of the communications and strategy team for financial promotions at the FSA, warned it is currently conducting a review of internet advertising to see if the industry has improved since its smaller review earlier in the year. But he warns the early signs are disappointing, with little sign of change. He adds: “We have been in contact with a number of companies promoting their products online and if the changes we have advised are not acted on, action may be taken.” Atkinson identifies key issues as the prominence of an APR quote, the prominence of risk warnings and the disclosure of fee information. He adds that the FSA logo cannot be used in any promotional material and that the regulatory body has received many complaints about this. However, Atkinson himself came under fire after his seminar from brokers pointing out the APR rate cannot be quoted in advertisements for publications with a long shelf life, such as Yellow Pages. The longevity of some promotional vehicles means companies may open themselves open to liability if they advertise in them. Mark Ehlinger, commercial and compliance director with The Coaching Platform, which provides advice and training on compliance issues, says the FSA risks losing the confidence of companies unless it takes firmer action against non-compliant advertisements for adverse products. The FSA stipulates advertisements should include the APR when adverse credit products are on offer. The APR should be in a noticeable position and of a similar size and prominence to price triggers listed. But Terry Pritchard, director of Chase UK, says adverts for adverse products from smaller firms that don’t meet FSA standards regularly appear in the press. Pritchard claims the FSA is not taking action against these firms despite repeated complaints, meaning firms like his that do comply lose business.
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