‘Misleading’ insurance firms slammed
January 16, 2007 by admin
Filed under News, News-Insurance
A number of insurance firms have been slammed by the Financial Services Authority (FSA) for misleading customers.
A number of high-profile firms have been told that they must stop using savings claims in their advertising that could be misleading.
The FSA has threatened companies with regulatory action if the practice continues and it comes after a large-scale investigation into press advertisements from insurance firms.
It was found that more than half of all press advertisements from motor insurance companies were misleading or unclear.
Home insurance firms did not perform much better, with over a quarter said to be misleading, while travel insurance advertisements were found to be of a higher standard.
“Most people rely on some form of insurance to protect them and advertising is a major influence on what they choose to buy,” said Vernon Everitt, FSA’s retail themes director.
“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.
“We will be back in three months to assess progress and will then decide whether further regulatory action is needed,” he added.
The FSA says it has contacted the senior management of offending firms, but some industry experts are calling for the companies to be named and shamed.
