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FCA tells claims managers to clean up their advertising

Fri 23 August 2019 11:20 | A A A

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(Sharecast News) - The City regulator has ordered claims management companies to stop using misleading advertising after finding widespread bad practice in the industry.

The Financial Services Authority said it was likely to refuse authorisation for firms that used very poor promotions after taking over regulation of the sector in April.

After reviewing more than 200 adverts, the FCA said it found many examples of poor practice by companies including:

Failing to state they were a claims manager

Not telling consumers they could pursue a claim through an ombudsman for no fee

Giving the impression consumers could get a better outcome using a claims manager

Using misleading case studies and making important information difficult to read

From now on, firms must identify themselves as claims managers, state prominently when an alternative no-fee option is available and display information related to fees or "no win, no fee" terms prominently.

Jonathan Davidson, the FCA's executive director of supervision for retail and authorisations, said: "CMCs [claims managers] using misleading, unclear and unfair advertising practices to get business is completely unacceptable. We won't hesitate to take action where we consider that customers are being misled or otherwise treated unfairly by poor advertising."

The FCA said it had reminded claims manager bosses of its rules, banned some adverts and visited firms whose promotions were particularly poor.

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