Sam Dunn: Financial adverts: give consumers a break

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The Independent Online

Of an evening, I regularly succumb to wild gestures and cursing at the television screen. And the object of my anger is nearly always advertisements and their moronic content.

At the moment, I can't seem to get away from those grooming ads where some slick beefcake covered in shaving foam gurns at the camera before pulling a blade across his face to get the girl.

Spare us the subliminal "lifestyle message", lads - it's a razor, not a sports car.

While it's OK - no, a duty - to guffaw at such passé nonsense, the laughs tend to fade fast when financial services are being promoted on the screen.

Buy a razor that isn't as good as the advert led you to believe, and you can easily vote with your wallet next time. But end up with a pension, investment or home loan that doesn't do what it says on the tin, and the repercussions can be rather more severe.

This sentiment lies behind last week's outburst from John McFall, chairman of the Treasury Select Committee, against the Financial Services Authority (see News, page 18).

His call for the City regulator to be tougher on slipshod financial promotions can, he says, easily be turned into action through greater public exposure of poor behaviour.

As a beacon for doing the right thing, Mr McFall holds up the Advertising Standards Authority (ASA), which, unlike the FSA, regularly publishes details of most complaints that pass under its nose and outlines where a complaint has been thrown out. Consumers quickly get a clear idea of what is and what isn't acceptable and learn how to spot bad salesmanship.

For its part, the City regulator goes to town only when it has found a financial services company to be in the wrong and decided to punish it in some form, whether with a fine or public censure.

This, Mr McFall warns, is not the way to do it. Without increased transparency and public scrutiny of diverse cases, "how is the public to trust enforcement is being undertaken?"

That financial services promotions are not covered by the ASA is an aberration, but there's no reason why the FSA can't do more.

The regulator says that its role as a statutory body prevents it from acting as freely as the ASA. It explains that a "light touch" approach - a phone call, say, to an errant company to stop it coming up with misleading ads again - works well enough.

This may well be but real progress - and by that I mean better understanding of financial promotions by both consumers and companies - usually emerges with more openness for all.

In 2005, the retail financial services sector spent £1.5bn on advertising products and services to get you to open your wallet.

That's a lot of firepower.

One of the best ways to protect consumers is for them to be better informed: the FSA should lend us some of its armour.

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