The FSA sets the rules on financial promotions, looks into consumers' complaints about adverts and monitors promotional material to check it is sticking to the rules. Firms are responsible for ensuring their promotions meet the 'clear, fair and not misleading' standard - they are not required to have their advertisements approved by the FSA before they are published. The regulator does, however, keep a close eye on them once they appear.
Where adverts fail to make the grade the FSA takes action. This can include:
- telling the firm to amend, or withdraw, the advert. This is the quickest, most effective way of protecting consumers;
- making a firm contact customers where it thinks they could have been seriously misled by an advert about a product and offering those customers the chance to pull out at no cost;
- fining or 'naming and shaming' a firm where there have been very serious or persistent breaches of the rules; and
- publishing statistics twice a year about the numbers and types of reports received about misleading adverts and the types of action taken. The first report will be published online in the spring.
Reporting a misleading advert
The FSA's guide explains how consumers can report an advert they think is misleading using the new online reporting form at www.fsa.gov.uk . Consumers can also write to the FSA with a copy of the advert to: 'Misleading financial promotion,' Correspondence Unit, FSA, 25 The North Colonnade, London E14 5HS. Alternatively they can ring the FSA Helpline on 0845 606 1234 for advice on how to report a misleading advert.
The FSA will assess reports of misleading adverts, following them up effectively and efficiently. In most cases, this will mean talking directly to the firm and getting them to change or withdraw their advert without the need for further action on the FSA's part. For particularly serious or persistent breaches of the rules, the FSA will take enforcement action which takes longer.
The FSA provides information about successful enforcement actions. And from next spring it will also be providing a six monthly overview summarising the reports that it has received from consumers, giving a flavour of the types of promotions which consumers have helped to change.
Background
- The online guide has been produced following a report last April which set out clearly to firms the standards that they need to apply to advertisements. It emphasised that adverts should provide a balanced description of the good and bad points; to avoid hidden features and small print; to avoid misleading statements and to take particular care when advertising complex products. The FSA is currently conducting a project monitoring how well firms are complying with these standards.
- The online guide features mocked up examples of adverts which use small print to hide important information and explains how the FSA deals with them to ensure that adverts produce a balanced picture of the main risks and drawbacks of a product. The mocked up adverts are available from the FSA press office on 020 7676 3232.
- Financial promotions include adverts in newspapers and magazines; product brochures, leaflets and other marketing literature; direct mail shots; posters; TV and radio adverts; promotional e-mails and text messages; and adverts on websites, including product providers' own sites. For more details about which products are covered by the FSA's rules and which aren't see www.fsa.gov.uk .
- The FSA regulates the financial services industry and has four objectives under the Financial Services and Markets Act 2000 : maintaining market confidence; promoting public understanding of the financial system; the appropriate degree of protection of consumers; and fighting financial crime.
- The FSA aims to maintain efficient, orderly and clean financial markets and help retail consumers achieve a fair deal.
