The PFCA was pleased to be invited to engage with the Advertising Standards Authority [ASA] prior to the release of its recent updated guidance, which has been designed to help CMCs comply with the Committee of Advertising Code [CAP Code]. There has, in recent times, been a number of complaints to the ASA about CMC marketing. In most circumstances the complaints focus on advertising claims in respect of chances of success, average pay-out and fees. It is not unusual for complainants to complain that claims are ambiguous or exaggerated, or they cannot be substantiated thereby not complying with the requirements of the UK Code of Non-broadcast Advertising and Direct & Promotional Marketing [the Relevant Code].
Who complains? Observer’s ironic observations
Although certain observers point out that there is often only one complainant and that complainant is often a financial institution also being one of the most regularly complained about for mis-selling financial products which feature highly in the list of rejected cases overturned by the Financial Ombudsman Service [FOS] in favour of the consumers. However, those observers miss the point, despite their ironic observations. The bottom line is CMCs, like all advertisers, have to take extra steps to ensure their advertisements comply, or they run the risk of a finding against them at an ASA Adjudication.
Additional risk for CMCs
In addition to a risk of possibly being in breach of the Relevant Code, the Claims Management Regulator [CMR] could review adverse adjudications and consider that the negative ruling suggested the CMC had also breached the CMR Conduct of Authorised Persons Rules as these also set out a number of obligations in respect of how CMCs market and advertise their services.
Third party oversight – An independent view
The PFCA recommends that all CMCs regularly check their websites and other advertising materials to ensure that any marketing complies with the Relevant Code. Although it is important that all adverting and marketing staff (including outsourced agencies) are familiar with the required advertising standards there is often no substitute for independent third party oversight of these activities. The important points CMCs need to consider is are their advertisements likely to be judged by others as misleading? Sometime the only effective way to consider that is to look at an advisement through the eyes of an uninformed person (not easy). Regulators are likely to consider an advert as likely to deceive consumers if there is ambiguity, missing or false information. Such adverts are also likely to be considered deceptive if consumers are likely to make transaction decisions they would not have otherwise taken.
Follow the updated ASA guidance
However, despite robust procedures a CMC might still be complained about. This should not be frowned upon; the ability to complain is part of any consumer’s right of access to the ASA. The important issue is can the CMC, or any complained about advertiser, justify its claims so the result of the adjudication is “Not upheld”. All advertisers, including CMCs, need to hold evidence for claims made in marketing materials. If CMCs follow the updated ASA guidance hopefully there will be no need for single complaints to challenge every CMC claim.