The FSA has raised concerns over the web-based financial promotions of 11 intermediaries marketing VCTs and is considering enforcement action against the worst offenders.
The regulator identified VCTs as an area of potential risk to consumers in March 2005 and also wrote to intermediaries in August over worries investors were not being given a balanced view of the risks and advantages of the product.
The FSA found most web-based promotions did not contain adequate explanation of how a VCT works, with some sites providing no explanation at all.
FSA director of retail themes Vernon Everitt says: All financial promotions must be clear, fair and not misleading and- particularly with investments such as VCTs -must be balanced. Most web-based promotions we reviewed did not explain all the main risks prominently.