The Financial Services Authority (FSA) has recently published the results of an independent review of firms' compliance with its financial promotions requirements (the Review). The Review examined a sample of press, magazine and internet promotions.
In relation to insurance promotions in the press, the Review concluded that the prominence of key information could still be improved. One particular issue that was highlighted was the lack of clarity surrounding administration fees which can have a significant impact on the competitiveness of a customer's premium.
The Review also found, in relation to insurance promotions on the internet, that some websites were using indicative insurance quotes which were not accurately substantiated with the relevant information. The Review noted that several websites made claims "guaranteeing" that they were able to offer the cheapest cover, without any kind of substantiation.
Overall the Review concluded that there was a high level of compliance with the financial promotion rules. It did not identify any significant concerns relating to particular products or any systematic breaches by particular firms. The FSA highlighted that financial promotions should comply with the FSA's rules on a "stand-alone" basis, without relying on subsequent promotions or pre-sale systems to complete compliance.
The FSA has stated that it will be taking further actions including:
- maintaining routine monitoring of press promotions;
- carrying out a thematic review of internet advertising in 2010; and
- taking robust supervisory action against non-compliant internet promotions.