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FSA sets probe priorities

The FSA plans to monitor closely the advertising and marketing of equity-release products, sub-prime mortgages and debt consolidation by providers and brokers.

Director of retail themes Anna Bradley says that these areas will be the priorities for the regulator’s financial promotions enforcement division in coming months because the products pose a relatively high risk for vulnerable consumers.

It will be examining whether consumers could be sold unnecessary insurance cover by brokers making inaccurate or false claims.

The division will also be examining firms’ preparatory work for marketing child trust funds, mortgage networks’ regulatory controls on their members’ promotions to customers and early work by firms on the promotion of general insurance under the new FSA regime.

Over the last nine months, the FSA has reviewed 30 websites, resulting in six cases where action has been take. It has reviewed 20 TV and radio promotions, resulting in action in five cases, and 50 direct-mail promotions resulting in 14 cases where action was taken.

The FSA has asked for 44 firms to amend promotions and a further eight to contact customers who had bought a product, offering them the opportunity to withdraw at no cost if they thought they had been misled. It is reviewing 162 cases.

Director of retail themes Anna Bradley says: “As the recent disciplinary action against Axa, Canto and Hemscott illustrates, the real issues remain with firms’ systems and controls and recent monitoring has shown that there is much to do in encouraging some companies to comply with our rules.”

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