AXA Sun Life has been handed a £500,000 FSA fine for misleading advertisements on two of its products.
The adverts were part of a campaign spanning February 2002 to January 2004, affecting around 200,000 people who purchased one of the two products featured.
The FSA found AXA Sun Life's advertisements for the Bonus Cash Builder Plus Plan (BCP) and the Guaranteed Over 50 Plan (GO50) lacked sufficient information about how the product worked or the risks involved.
Around 200,000 people are thought to have bought one of the two products between 2002 and 2004, and have therefore been placed at risk of being misled, says the FSA.
The BCP is a with-profits endowment assurance policy ensuring a cash amount on maturity and life cover during the investment period, as long as those premiums continue to be paid. Early redemption may mean the customer would receive far less than the value of the premiums paid in to the BCP, however, such information was less prominent in the advert.
The second product was a GO50 whole of life policy, providing a fixed cash sum on the death of the policy holder. As a whole of life insurance contract, if the policy is cancelled the customer may get recieve far less than the value of the premiums paid into the policy and if it is cashed in during the early years, then nothing, according to the FSA.
Adverts stretching January 2002 and April 2003 included comparative data that was also found to be inaccurate, while AXA then failed to immediately inform the FSA of its error.
The FSA noted Axa had provided incorrect building society data in a chart showing a performance comparison of BCP with a building society account.
When it was discovered and put the error right in April 2003, AXA only then wrote to the FSA informing of its mistake in November 2003.
Following request from the FSA all adverts were subsequently removed in January 2004, and AXA has since issued remedial letters to all BCP customers affected by the inaccurate comparative data to clarify the product's features.
The FSA said the impact of the failings, both actual and potential, "has been mitigated to some extent by the firm's co-operation".
In response, AXA Sun Life has accepted the FSA Final Notice adding all necessary amendments have now been made.
Paul Evans, chief executive of AXA Sun Life, says: “AXA Sun Life is pleased that the regulator has placed on record that we have been ‘open and co-operative’ throughout their investigation and that AXA ‘should receive considerable credit’ for the restorative action we have taken.”IFAonline
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Some 2,000 consumers affected