Recently, the regulator warned that savings claims made in some in-surance advertisements were misleading or unclear. It has told firms to put a stop to the practice or face regulatory action.
This follows a review of press ad-verts by 57 firms selling motor insurance. These firms acc-ounted for more than three-quarters of the press advertising spend in this area last year.
The regulator found more than half of all motor insurance adverts containing savings claims were either unclear or misleading. It had similar concerns about a quarter of home insurance ads.
These findings make for dismal reading but clients are being left in the dark about which ads are misleading and which companies are behind them.
The same goes for the FSA’s finding, publicised earlier this month, that two-thirds of the mortgage advice firms it surveyed have inadequate processes. Nobody, apart from the firms and the regulator, knows who these offenders are.
This has prompted Which? to call on the FSA to practice what it preaches and be transparent about offenders.
Which? questions why the FSA is consistently reluctant to say who is failing to meet its standards.
This is in contrast to the Advertising Standards Authority – the body which polices non-financial promotions. It helpfully publishes a list of offenders on its website. It doesn’t just tell firms behind closed doors that they have three months to improve.
By not publishing its findings, the FSA is not helping firms that are doing all they can to be compliant and have their clients’ best interests at heart.
The public doesn’t know if their mortgage advice firm is a good one or not so the whole sector is in danger of being tarnished because of the bad practicesof a few.
And surely if a firm thought its name was going to be dragged through the press it would be more likely to ensure it is doing all it can to meet the regulator’s requirements.
On a different note, something that should be welcomed from the FSA is the setting up of a team to tackle the risks posed by financial crime. The division will examine the risks facing consumers.
With financial crime and identity fraud a reality in our society, anything that helps cut it is good.
I know how it feels to be a victim, having had my bank card cloned a few years ago and used in areas of east London I had never even heard of.
The thought of someone else spending your money is traumatic – especially when they clear out your bank account a few days after pay day and you haven’t even been on a shopping spree.
Not so welcome this month is the number of lenders pulling their fixed rate deals and some putting their SVRs up more than the 0.25% hike in the Bank of England base rate.
But it does make this an ideal time to sit down with your clients to ensure they are getting the best deals possible.