The Financial Services Authority (FSA) removed 327 misleading financial adverts in 2011 and 262 in 2010. And yet, it won’t name and shame them.
Which? obtained the data under the Freedom of Information Act (FoIA), but the FSA refused to reveal the companies and products these ads were promoting.
New regulator with proactive powers
Following pressure from Which? and other consumer groups, the government has announced it will give the Financial Conduct Authority, which replaces the FSA next year, the power to name and shame companies when it finds misleading ads.
When Which? looked at a range of financial adverts earlier this year, we found several that our legal expert, a barrister specialising in consumer law, believed could breach the Consumer Protection from Unfair Trading Regulations. Some 66% of consumers want the financial regulator to be proactive about taking misleading financial adverts off the market.
What Which? wants the FCA to do about misleading ads
Which? wants the FCA to be a strong, open and proactive watchdog that ensures all products on the market are suitable for consumers and that products are advertised responsibly. We are pleased that the FCA, unlike the FSA, will publish details (including the name of the company) when it has found a dodgy financial promotion.
Our findings demonstrate why this new approach is important – 300 adverts have been removed but no-one knows which companies and products they were promoting.
Watchdog not Lapdog campaign
We’re monitoring the progress of the Financial Services Bill to make sure it creates a ‘Watchdog not Lapdog’ regulator. Our research shows consumers agree that its time the regulator took a stronger and more proactive approach.
We believe the new financial regulator should stand up for consumers and challenge the banks, which is why we launched our ‘Watchdog not Lapdog’ campaign.
At the start of next year, the current regulator, the Financial Services Authority (FSA), will split into two new authorities:
- The Financial Conduct Authority (FCA), which will have responsibility for protecting consumers.
- The Prudential Regulation Authority (PRA), which will focus on maintaining financial stability.
We want to ensure that the FCA puts consumer protection at the heart of everything it does and make sure it becomes a watchdog that keeps the financial services industry in check, not a lapdog that panders to it.
- ‘Watchdog not Lapdog’ campaign – ask your MP to adopt the Which? Watchdog
- Dodgy financial ads and scams – spotted a dodgy promotion? Email us with details
- – how to take action if you’re not happy with your bank