Over 30 types of “unfair” sales practices have been banned, including bogus closing down sales, limited-time offers that are later extended, false testimonials on websites and high-pressure sales techniques.
The changes adopt an EU directive requiring all businesses to treat customers fairly and will be enforced by the Office of Fair Trading and Trading Standards. Breaches of the regulations could lead to substantial fines and prison sentences.
Herbert Smith partner Joel Smith says the move signifies the biggest change in advertising regulations in 40 years. He says: “Financial services firms need to think carefully about the way they craft adverts. Advertisers need to be aware of the new regulations and ensure from a consumer perspective that marketing is not misleading and gives enough information to enable consumers to make informed choices.”