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Firms face tougher marketing rules

Financial services advertising, including online marketing, will face even tougher restrictions under the new consumer protection regulations introduced this week, according to law firm Herbert Smith.

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.”



The first Financial Services Act was passed 20 years ago. Few people will remember the early fumblings of the various bodies appointed to self-regulate their various financial sectors. They were too cosy and did not really know what was required but, by hell, they would now.

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Complaints to the Financial Ombudsman Service about IFAs have plummeted from 12 per cent of total cases in 2006/07 to just 4 per cent in 2007/08 while bank complaints rocketed.


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