The delicate arrangement of words into sentences provides pleasure for many people. One does not need to revere Shakespeare, James Joyce or Jack Vance to appreciate this art form. It can transform the mundane and dreary into arresting and exotic and convert lack of interest into attentive curiosity. Sadly, it can also be used to misinform and cast a rose-coloured glow over something brown and moist.
Numerous instances have caught my attention recently, with one gushing email from Northern Rock, or Virgin Money as it is now renamed. Its recent message to supporting brokers advised a further reduction in flexibility whereby the availability of interest-only loans was being reduced from 75 per cent to 70 per cent of the property value. This unhelpful adjustment was described as: “Supporting customers by minimising the risk that their chosen method of mortgage repayment could result in a shortfall at the end of their term.” Call it spin or creative licence, it cannot hide the fact that double-talk is still alive and well in financial services.
The use of carefully crafted phraseology extends to advertising as well. The relentless push to find some new form of misselling continues apace with a recent national newspaper advert suggesting that “approximately 1,500,000 divorcees are losing out financially” in respect of pension settlements. Naturally the advertiser, which is both FSA and MoJ-regulated, is conveniently situated to assist. This grandiose number may or may not have been plucked out of the air, although the possibility exists that it results from a similar mathematical caprice to that used by the FSA when assessing misselling detriment.
A similar use of exaggeration inhabits the newspaper advert from Policy- PaybackPlus which served to excite interest with the splendid slogan “you could be owed thousands without even knowing it”. It goes on to explain: “Our business is winning compensation for holders of life policies and investments – whether or not you believe there is a problem.”
A fishing expedition designed to attract respondents, which will, no doubt, result in a host of pointless enquiries, spurious complaints and FOS escalations. The issue here, apart from the false expectations given to consumers, is the use of language. The rousing and enticing phraseology designed to bring out the worst aspects of human behaviour – money lust and the pursuit of something for nothing.
Another example emanates from PPI Return, a subsidiary of Goldsmith Williams, a firm of solicitors eager to gain conveyancing instructions from advisers. Its unsolicited email to me explained the PPI scandal thus: “The misselling of PPI has become a prolonged scandal that has involved the scamming of thousands of people over a number of years. Dishonest financial advisers have taken advantage of their clients and for a long time were able to get away with it. Plus, banks have made huge profits by selling PPI, as only 10 per cent of claims ever paid out!”
According to the FOS annual report, PPI complaints regarding banks, building societies and general insurers were 81 per cent of the total.
The prize for the most hyped description of an initiative, one which was subsequently aborted, must be “Making a Real Difference”. This brainchild of the FSA was quietly allowed to die when the concept of principle-based regulation was put to the sword. Practitioners might grimace in a rictus of agony when they reflect that this is one descriptive truly reflective of reality. Without any doubt, the FSA has made a real difference – postcards please on what these differences have been.
Alan Lakey is partner at Highclere Financial Services