WIREDGOV

The Financial Services Authority (FSA) yesterday announced the outcome of its review of the use of savings claims in general insurance press advertising, which has found a significant improvement in standards since it raised concerns in January 2007.

The review of all home and motor insurance advertising appearing in the national press over a ten day period in April 2007 found that 94% of advertisements issued by 28 firms fairly and accurately described what savings consumers would be able to achieve, while 6% contained misleading savings claims.

This follows the financial regulator's challenge to firms to improve standards after the FSA's January review revealed that 45% of home and motor insurance press advertising made misleading savings claims.

Insurance advertisements can be misleading if they give the impression that the majority of consumers are eligible for the advertised savings when this is not in fact the case. This means that consumers can be induced into contacting a firm on a misleading basis.

Vernon Everitt, the FSA's Director of Retail Themes, said:

"We said in January that firms needed to shape up and fast, so this progress is good to see. What really matters now is that standards remain consistently high across print, broadcast and other advertising and we will be watching to make sure that they do."

"In the meantime, consumers should always look beyond headline savings and other claims to ensure that the cover on offer is right for them. The jargon-free, impartial information about insurance on our moneymadeclear website will help people get the right deal for them."

The FSA has told the small number of firms who failed to produce advertisements of the required standard to take immediate steps to deal with its concerns.

Consumers can get help choosing insurance products by using the range of free, impartial information, including an insurance guide – Are you covered? – which is available on the FSA's consumer website or by calling the FSA Consumer Helpline on 0845 606 1234.

Notes for editors

• The latest review did not include advertisements for travel insurance, as the FSA did not identify any significant failings in this area in its initial review, which reported in January 2007.
• Full details of the review, the initial review and information on the FSA's financial promotions work can be found on the financial promotions section of its website.
• The FSA operates a proactive, risk-based approach to financial promotions focusing on areas where consumers could be most at risk. The FSA's new, more principles-based approach to financial promotions for investment products will take effect in November 2007. This new regime will place a greater onus on outcomes and the responsibility of firms' senior management in achieving these outcomes, and the FSA is currently engaging with firms and the advertising industry to ensure our standards are understood.
• Anyone who sees an advert or other promotion that they think is misleading can report it by calling the FSA's Financial Promotions hotline on 08457 300 168.
• The FSA regulates the financial services industry and has four objectives under the Financial Services and Markets Act 2000: maintaining market confidence; promoting public understanding of the financial system; securing the appropriate degree of protection for consumers; and fighting financial crime.
• The FSA aims to promote efficient, orderly and fair markets, help retail consumers achieve a fair deal and improve its business capability and effectiveness.