The procedure for dealing with complaints against British financial services advertising must be overhauled, a new report urges.
The Financial Services Consumer Panel, an advisory body to the Financial Services Authority, argues that the restrictions by which the FSA is bound when reviewing complaints are too secretive and are “harming more consumers than they help.”
At present, the watchdog is forbidden from revealing its verdict on an ad until the full complaints procedure has been implemented – a process that can drag on for months or even years.
Rather than undergo this drawn-out system for every complaint, the FSA often urges companies to drop promotional material with the potential to mislead. However, as a result the regulator cannot release its opinion of these ads, meaning consumers may not know they may have been misled.
The Panel contrasts the FSA’s activities with those of bodies such as the Advertising Standards Authority, which regulates print and outdoor ads. On average, the ASA deals with complaints in 21 days and publishes its verdicts on the web.
The legislation which set up the FSA, the Financial Service and Markets Act 2000, is due for review in the next couple of years, at which point the Panel hopes the system will be improved. Said Colin Brown, the Panel’s chairman: “We are raising this issue now, so that we can get ideas on how to improve the system on the table early.”
Data sourced from: BBC Online Business News (UK); additional content by WARC staff