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‘FSA is soft on guilty’

The FSA’s move to rein in misleading promotions by protection providers has been slammed as “woefully inadequate” by consumer group Which?.

The FSA says it has uncovered evidence of scaremongering in product literature. However, Which? says the regulator should impose severe penalties on guilty providers rather than just writing to warn them.

A recent FSA investigation into promotions by 25 providers found that some cited statistics on illnesses where not all forms of the illness are covered by the policy.

Some providers were found to have made unsubstantiated claims about the price, uniqueness and coverage of the policy or to have given the false impression that critical illness is a simple product.

FSA spokesman David Whitely says: “Our financial promotion regime is designed to ensure that promotions are fair, not misleading, and balanced. If customers feel they do not understand a product based on the promotion, they sho- uld seek advice.”

Which? principal policy adviser Laurence Baxter says: “The FSA’s response to tackling these problems is woefully inadequate. Instead of imposing the severest sanctions possible under their own rules, which might involve slapping punitive fines on the companies in question, they are taking the almost conciliatory approach of writing to the firms asking them to stop.

“It is a bit like a policeman watching a bank robbery and then telling the robbers that they should not have done it.”

Lifesearch senior technical adviser Kevin Carr says: “It is difficult, if not impossible, for any non-advisers or non-protection experts to address these issues without giving advice and, therefore, the real issue is whether or not such financial promotions are misleading customers by giving advice.”

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