A third of Which? members have spotted a dubious financial advert, with hard-to-read terms and conditions, small print and unrealistic returns highlighted.
The findings chime with official figures showing the Financial Services Authority (FSA) has taken action in an increasing number of cases involving financial ads. In 2009, the FSA ordered 170 financial adverts to be removed or amended, rising to 262 in 2010 (the most recent year for which this information is available).
Despite the growing number of complaints tackled by the City watchdog, the number of cases that result in the provider being named and fined remains very low – just one fine was imposed in 2011 for misleading advertising, none in 2010 and three in 2009.
Watchdog, not Lapdog
The low level of punitive action taken by the FSA has drawn criticism from Which?, and forms part of the Watchdog, not Lapdog campaign. The campaign calls for regulators to take a tougher stance in protecting the public from errant firms.
Which? money expert Dan Moore said: ‘There is clearly a pressing need for a regulator that will take action in cases where a provider has circulated a dubious ad. Consumers who are persuaded by the promotion could lose out financially. We hope that the Financial Conduct Authority, which is set to replace the FSA, will take firmer action.’
Questionable financial ads
When Which? looked at a range of financial adverts, we found several that our legal expert, a barrister specialising in consumer law, believed could breach the Consumer Protection from Unfair Trading Regulations – either because they contained misleading information or omitted important information.
These included adverts for home insurance, fixed-rate Isas, current accounts and claims management services. One, an investment ad from Ethical Forestry, quoted what appeared to be endorsements from two national national newspapers, but these were lifted from adverts the company had placed with the papers.
- – what to do if you spot a dubious financial advert
- Call the Which? Money Helpline – if you require help when considering a new financial product