Article by Phil
More financial planning advice adverts banned.
The Advertising Standards Authority (ASA) has cracked down on Tik Tok advertising by law firm TMS Legal. This follows on the heels of the Financial Conduct Authority (FCA) stepping up its own actions to control financial promotions especially online.
The Tik Tok adverts were encouraging claims against Moneybarn and Vanquis credit alleging that TMS Legal had recovered compensation cheques for clients who had unenforceable credit agreements. It turns out that the adverts did not feature TMS legal clients but actors pretending to be clients. The ASA found that this was misleading, and the adverts have been withdrawn. It’s interesting that it took the ASA to intervene in the law firms’ actions rather than the Solicitors Regulatory Authority (SRA) who seem to be behind the curve on this kind of misleading adverting by law firms.
It’s not just law firms who are being caught out. The ASA also intervened to remove adverts on social media by Essex County Cricket Club of all places. It seems Essex are sponsored by Fan Craze Technologies a crypto trading company. They had posted tweets on behalf of Fan Craze which were promoting the value of Non-Fungible Tokens (NFT’s). A very complex and high risk crypto “investment”. Essex didn’t think that the tweets constituted advertising for financial planning advice, which is probably understandable. But the ASA found that it was, and the advert failed on multiple counts including failure to disclose that the value could go down as well as up. This is a good example of how easy it is for crypto and other unregulated financial promotions to pop up in the most unlikely of places.
The Information Commissioners Office (ICO) is also stepping up its efforts online by warning firms against their use of Cookies on their websites. The ICO feels that too many firms are making it difficult for customers using websites to reject the use of Cookies which use personal data for advertising purposes. Too often if a customer tries to reject the use of Cookies websites will then give the user a different experience making it more difficult to use the website. This is wrong.
These tactics are being used by some of the UK’s biggest websites. The ICO has given firms 30 days to sort out their Cookie policies or they are threatening to take action.
The Treasury has also stepped in to act on Claims Management Companies (CMC’s) behaviour.
CMCs currently bring 20% of all the financial planning advice claims reviewed by the Financial Ombudsman Service (FOS), but only 50% of these are upheld. This is a lot of work for FOS. So, from next year they will be able to charge CMC’s a case review fee. Hopefully this will reduce the number of spurious claims brought by CMC’s and reduce the FOS workload, meaning that they can spend more time working on valid claims.
It’s not before time given that CMC’s can charge up to 40% of a client’s compensation.
These new charges will not apply to charities bringing claims on behalf of the people they are assisting. FOS continues to be a free service and people do not need to use a CMC to submit a claim. Many do though because they straggle with the paperwork.
