IFA and provider websites will come under the remit of the Advertising Standards Authority from the start of March, allowing consumers to make official complaints about the content if they feel it is misleading.
The extension of the ASA’s digital remit, announced by the Government last September, means all digital communications, including websites and emails, will fall under the code of advertising practice (Cap). This could see IFAs and providers named and shamed if complaints are upheld and they may be forced to remove paid-for-links to their site from search engines.
The ASA has seen a signif-icant rise in complaints about digital marketing in recent years. The internet is now the second most complained about medium after TV, with around 14 per cent of total complaints.
In 2009, the ASA received 3,546 complaints about marketing communications on the internet. However, nearly 57 per cent of internet ads which had complaints fell outside the ASA’s remit because they were from companies’ marketing communications on their own websites. From March, that will no longer be the case.
The Cap will now apply to all of a firm’s marketing communications on their website and in other non-paid-for space under a company’s control.
Generally, IFAs and financial services providers already have a high standard of communication as they must apply FSA rules. But while there may be crossover, there is also a risk that some communications could fall foul of the new rules.
As a result, IFAs and providers will need to audit and copy-check their websites.
Firms should identify the sections of the Cap and Cap guidance that are most relevant to their product or service areas and any claims they are making and should pay particular attention to the parts of their website likely to feature marketing communications.
The broad standard required is that firms should be “legal, honest, decent and truthful” and much of the language is similar to that used by the FSA but here are a few of the specifics which firms should pay particular attention to.
For the financial services industry, complying with these requirements is not rocket science. Firms have an existing compliance function that considers these issues in any above-the-line advertising or direct-mail communications and all firms have to consider the financial promotions regulations.
However, they should note that the ASA is different from the FSA. It is obliged to investigate every claim, even if only one person has taken offence.
In many cases of advertising and direct marketing claims, the ASA is more often than not locking the door after the horse has bolted as the promotion in question has often finished by the time a complaint is lodged.
Websites, however, are much longer-lived entities.
If you do get caught transgressing, the Cap you will naturally be obliged to change the content and that will involve time and costs.
In addition, the ASA has what seem to be significantly enhanced powers in the digital area. These are:
- An enhanced name and shame policy, allowing it to list details of an advertiser and the non-compliant marketing communication.
- Removal of paid-for search advertising. Ads that link to the page hosting the non-compliant marketing communication may be removed with the agreement of the search engines.
- ASA paid-for search advertisements. The ASA could place advertisements online highlighting an advertiser’s continued non-compliance.
For the ASA, there can be no grey areas.
We recommend you audit your site or commission an audit as soon as possible to get into shape before the March 1 deadline. It is important to audit all your interconnected sites, although there is still a some uncertainty about who is responsible for sites you might connect to – say, for example, an IFA linking to a provider site.
The ASA will audit your site for you and have published a standard price of £800 with a target time for an audit of 10 working days. Otherwise, you could do this yourself or seek help from an outside consultancy. It is not perhaps the same magnitude of risk as from other regulation but it is wise to minimise the risk to your reputation and make sure your website meets the new standards.
Offers of financial products must be set out in a way that allows them to be understood easily by the audience being addressed. Marketers must ensure that they do not take advantage of consumers’ inexperience or credulity.
Marketing communications should state the nature of the contract being offered, any limitation, expense, penalty or charge and the terms of withdrawal. Alternatively, if a marketing communication is short or general in its content, free material explaining the offer must be made readily available to consumers before a binding contract is entered into.
The basis used to calculate any rate of interest, forecast or projection must be apparent immediately.
Marketing communications must make clear that the value of investments is variable and, unless guaranteed, can go down as well as up. If the value of the investment is guaranteed, the marketing communication must explain the guarantee.