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Insurance companies in the UK are being warned by financial regulators to keep a tighter reign on their advertising, and to ensure that the advertising does not include false or misleading claims. In a crackdown against dodgy advertising tactics by insurers, the Financial Services Authority has given the industry just a few months to get their advertising under control and comply with regulations.
According to the FSA a number of insurance companies were taking part in false and misleading advertising, where consumer were being offered huge saving on their insurance, and were actually not making these savings despite the claims. Companies in the insurance industry that do not comply with the FSA’s demands to get a tighter control over advertising could now face huge fines in the future if their advertising is found to be misleading or false.
One FSA official stated: "Most people rely on some form of insurance to protect them and advertising is a major influence on what they choose to buy. So it must be clear, fair and not misleading, leaving people with a balanced picture of what's on offer. This work demonstrates that firms in the home, travel and car insurance markets must shape up and ensure that the claims they make don't mislead."
In response to the demands the Association of British Insurers, which is the governing body for insurance companies, said: "We take the FSA's concerns seriously. Offers must be accurate and deliver what the customer is led to expect. The ABI and our members will work closely with the FSA to achieve this."
The motor insurance company was identified as one of the main culprits of false or misleading advertising in terms of the cost of cover, with over fifty percent of these companies offers savings on premiums but failing to provide information with regards to how the consumer could actually make these savings.
Tom Smith
22.04.07
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