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FSA warns financial firms to play by the rules

30 November 2007
A review of the advertising on financial firms' websites has revealed that only three-quarters are meeting the Financial Services Authority's (FSA's) required standards. It found that the remaining quarter failed to present information in a clear way.

Director of retail policy and themes, Dan Waters, said: "For many people the internet is the channel of choice for shopping around for financial products. However, it can expose consumers to high risk as they are able to make instant purchases without advice. This is why it is so important that firms' websites are fair, clear and not misleading."

The authority visited 77 firms' websites 130 times and reported that the majority met its financial promotions requirements. However, 25 per cent ran sites that were difficult for consumers to use and did not sign-post important information.

Despite this, the review showed an improvement in standards compared with similar reviews carried out in 2005 and 2006, when widespread failings came to light. The FSA has now published new practice guidelines to spur companies on to changing sites where necessary.

"Although many firms' website-based promotions are meeting our requirements, we expect the senior management of all regulated firms to ensure their customers are treated fairly – and we will be looking at promotional websites again early next year to make sure that firms have taken our findings on board and are taking website design seriously," said Mr Waters.

The FSA is planning to start another review in March 2008 and says it will take action if there are further failings. Last week the authority fined two firms and stopped another from trading altogether, and says it is committed to ensuring that action is taken when firms ignore or contravene its rules.

Director of enforcement, Margaret Cole, said: "There are a number of actions we can take against firms and individuals, including fines, public censures or stopping firms and/or individuals from doing business. In addition to these penalties, we can also instruct a firm to conduct a detailed and lengthy review of their clients' files. This will establish whether any customers are owed redress and could cost firms many thousands of pounds."

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