The FSA seems to have taken an interest in Twitter recently and contacted a number of firms about their recent tweeting. Most of the comments on the Money Marketing website were asking why the FSA is not doing something more important rather than looking at social media.
Twitter allows you to write posts of up to 140 characters. Some people use Twitter for social reasons, some use it for work to promote their services and some use it for a bit of both. There has been a degree of debate from mortgage tweeters recently as to whether or not the FSA rules still apply to Twitter. To be fair to the FSA, I think Twitter usage is widespread enough that it is important for firms using it to stay the right side of the rules when mentioning products in their tweets.
The FSA produced a guide last year entitled, Financial Promotions Using New Media. The guide is rather short but it is explicit and confirms that if you are doing anything more than image advertisements on any media, new or old, then you need to use the usual rules on risk warnings and disclosures. It suggested that doing this within 140 characters may be difficult, so using it may not be possible.
An FSA spokesman recently said: “There are a handful of exceptions but, generally speaking, mortgage adverts need a prominent risk warning”. The resulting debate between mortgage tweeters was generally over what is an advert. One user suggested that as their tweets about products did not ask people to contact them about the products, they were not advertising. Another suggestion was that Twitter was simply banter between friends. I disagree with both of these. I did not think a promotion needed to invite a customer to contact the firm, with Twitter all you have to do is to click reply. If you wrote a newsletter which mentioned some new mortgage rates and you emailed it to several hundred people of whom some were clients and some were industry contacts, I am sure that your compliance department would be keen to see it first to make sure it had the necessary warning and disclosure. Some brokers clearly do not feel that this is necessary with Twitter.
With regard to whether or not Twitter simply facilitates banter, I think it depends on who is doing the tweeting. If you are a mortgage broker tweeting under your company name and the majority of your followers are clients, then I do not think this is simply banter. To me, tweeting product details is promotion and the normal rules apply. Some Twitter users have queried why newspapers can quote rates without APRs, etc. The difference is that newspapers do not earn their living by selling mortgages whereas brokers do. One comment on the Money Marketing website asked why a bank can advertise at a football ground, but the advert simply stated “Woolwich Offset Mortgages”.
I am sure this qualifies as image advertising. If you are a regulated mortgage broker earning a living by selling mortgages then you need to abide by the FSA’s rules. If you are in doubt, I am sure if you contact the FSA it will confirm what you are allowed to do and what you are not.
Jonathan Cornell is head of communications at First Action Finance