The regulations surrounding financial services advertising could be set for a major overhaul as the Department Of Trade And Industry (DTI) and the Financial Services Authority (FSA) hold reviews into financial advertising standards.
The DTI, which is carrying out a consultation for the Consumer Credit Act, intends to create a “regime that simplifies advertising rules and focuses on the essential information,” while the FSA is proposing that the requirement for extension and detailed legal information in print ads for mortgage products be lifted.
ISBA, which is preparing submissions to both bodies, has said it backs the move to make financial services advertising clearer and less misleading and supports the abolition of legal jargon and small print.
ISBA’s director of public affairs, Ian Twinn, said: “The current regulations for financial service advertising serve neither business or consumers. These two consultations running in parallel represent the greatest opportunity in many years for financial services advertisers to press the case for clearer and simpler regulations.”
A spokesperson for ISBA added: “We believe that the financial and legal information which currently has to be included in advertising misunderstands the role of advertising itself, which is to inform consumers of the product. The detail, which often appears in small print, is rarely read by consumers and serves only to confuse them.”
The consultations comes at a time when concern and media coverage about the growing personal debt problem is increasing. A recent episode of Radio 4 consumer programme Inside Money, for example, was critical of financial advertising based on previous performance and the use of celebrities to endorse financial products, suggesting that people could be persuaded to sign up to financial services for the wrong reasons.
The DTI called a summit late last year to discuss ways to address the problem. Among the concerns addressed was that of some financial services companies being too aggressive with their marketing and intentionally misleading customers. The meeting was prompted by research from the Citizen’s Advice Bureau which showed that over 700,000 people went to Citizens Advice regarding debts in 1999, an increase of 46% on three years ago.
Department Of Trade And Industry: 020 7215 5600 www.dti.gov.uk Financial Services Authority: 020 7676 1000 www.fsa.gov.uk ISBA: 020 7499 7502 www.isba.org.uk
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