The Incorporated Society for British Advertisers (ISBA) is pressing for a radical overhaul of the complex and cumbersome regulations surrounding financial service ads.
The organisation is urging members to support its submissions to two parallel consultations by the Financial Services Authority (FSA) and the Department for Trade and Industry (DTI), which ISBA claims could lead to the “biggest shake-up in decades” for advertisers in this sector.
The first consultation, in mid-September, is by the FSA and proposes lifting the requirement for extensive and detailed legal information in print ads for mortgages. Instead the FSA wants to introduce a requirement that “equal prominence” must be given to the benefits and drawbacks of products, a move that ISBA believes could potentially confuse customers further and goes against the core purpose of advertising.
“We believe that in press ads a warning such as ‘your home is at risk if you do not pay your mortgage’ is sufficient,” says ISBA director of public affairs Ian Twinn.
He argues that consumers should be given full information of the financial risks when they actually buy an advertised product.
A second consultation by the DTI in October aims to overhaul the Consumer Credit Act to “create a regime that simplifies advertising rules and focuses on the essential information”. While the two consultations are separate, the DTI has stated it will ensure that rules in the Consumer Credit Act are consistent with the new FSA regulations.
According to ISBA, the two consultations offer an “unprecedented opportunity” to achieve “greater transparency and clarity for consumers” in financial service ads.