Treasury Committee chairman John McFall MP has written to the Financial Services Authority criticising the way it regulates financial advertising.
In his letter to Callum McCarthy, chairman of the FSA, McFall points out the Financial Services Consumer Panel has said in the past it is “a quirk of the set up” financial advertising is not covered by the Advertising Standards Authority (ASA).
But Donna Mitchell, press officer at the ASA, says it does regulate financial advertising and there are examples of judgments in the past where it has upheld complaints against financial services firms.
In July, the ASA upheld a complaint against Barclays over a TV advert for its regular saver account, saying the advert was misleading and breached clauses on the use of qualifications and superimposed text.
Mitchell suggests McFall and the Consumer Panel are concerned the FSA does not try to get adverts changed and it will only name offenders after a formal disciplinary process.
The ASA’s primary sanction is adverse publicity for those advertisers which break the rules and it publishes the results of investigations explaining why it has found for or against a certain advert on its website.
The ASA also has a code which advertisers must comply with.
McFall states: “The FSA has, at the moment, a seemingly far less transparent system in regard to financial advertisements, with no publication of complaints, and little public record of which companies have broken the rules.”
He believes the FSA should examine whether any aspects of the ASA model would prove useful in protecting consumers’ interests.
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