As the FSA controls the advertising for more and more financial products and its rules and guidelines burgeon, advertisers are becoming increasingly frustrated at its inability to offer any significant pre-publication advice service. We investigate
Who: The Incorporated Society of British Advertisers (ISBA) & the Financial Services Authority
When: September 2003
Advertiser trade body the Incorporated Society of British Advertisers ("ISBA") called on the Financial Services Authority ("FSA") to provide a copy approval service to financial advertisers.
ISBA differentiated the FSA's failure to provide such a service from the position with other advertising regulators. It indicated that the Independent Television Commission, the Radio Authority and the Advertising Standards Authority ("ASA") already provided a copy approval service.
In fact, ISBA was wrong in all of these three cases. A copy approval service is certainly available in the area of non-broadcast advertising, but it is the ASA's sister body, the Committee of Advertising Practice (which unlike the ASA is very much an advertising industry body) which provides the copy clearance service). So far as TV advertising is concerned, the ITC offers no copy approval service of which marketinglaw is aware. It is the creature of the ITV Networks, the Broadcast Advertising Clearance Centre, which provides that assistance to advertisers and their agencies. Similarly, in the radio advertising sector, it is not the Radio Authority that provides clearance advice, but the Radio Advertising Clearance Centre.
But although ISBA is wrong on who does the pre-clearance advising in these areas, the point remains the same, namely that the Financial Services Authority does not offer this sort of service. This is a state of affairs which is becoming of increasing concern to advertisers as FSA rules affecting financial advertising become ever more rigid and wide-ranging. This trend is also not going to change with the selling of mortgages and general insurance coming under the FSA's wing within the next year or so.
So far, the FSA has not given in to this pressure. It conducts continuous monitoring of advertising materials to check compliance, but it simply does not have the resources to offer a thorough-going copy advice service. In any event, it says, when it comes down to it, the rules are pretty simple. Financial promotions must be clear, fair and not misleading, and must present a balanced picture of the product. Hmm……….
Why this matters:
One of ISBA's beefs is that even when an advertiser contacts the FSA with a specific query about its proposed advertising, the financial regulator is unable to field sufficient numbers of experienced staff to be able to deal generally with these queries.
As it stands, the Committee of Advertising Practice is just about holding the line in terms of its free copy advice service for non-broadcast advertising. However, the CAP and the ASA are already increasingly taking the position on specialised areas such as the treatment of APR in consumer credit advertising, that these are not within their core expertise and should be dealt with by other more relevant bodies such as the Office of Fair Trading.
One can only expect this Pontius Pilate situation to continue as the advertising of mortgages and general insurance is covered by specific FSA rules and guidelines.
Here on marketinglaw we have already expressed the view that within two to three years at the outside, the FSA will have moved to detailed reporting of its adjudications on complaints in respect of financial promotions. This will mean a change in the law as the FSA is currently bound by duties of confidentiality, but nevertheless we expect it to happen.
Here again, there will be an uncomfortable overlap between the remit of the Advertising Standards Authority and the Committee of Advertising Practice on the one hand and the FSA on the other, with the ASA increasingly tempted by limited resources to bat complaints over allegedly misleading mortgage advertising, for example, over to the FSA.
All these factors point to a situation in the not too distant future where there will be enormous pressure on the FSA to effect a step change in its role in financial promotion regulation.
As this occurs and its workload handling complaints over financial promotions exponentially increases, reasons of self-preservation alone will suggest that the FSA should be offering a pre-publication copy clearance service as ISBA suggests.