Revealed in a freedom of information request, law firm Reynolds Porter Chamberlain (RPC) has learned more firms are being forced to amend or withdraw advertising material after FSA intervention.
Financial promotions which were withdrawn or amended by regulated firms jumped 32% to 262 last year, from 199 in 2009, according to FSA figures.
This number continues to increase this year, with 32% more promotions withdrawn or amended in just the first quarter – 66 compared to 50 in Q1 2010.
When the FSA becomes the Financial Conduct Authority (FCA) at the end of 2012, it will have the additional powers to name and shame businesses it considers is providing promotional material likely to be misleading. It will also be able to order the withdrawal or amendment of the promotional material. Currently the FSA can only warn firms it might face disciplinary action.
Jonathan Davies, a partner at RPC, said giving equal prominence to risks and rewards was a “very judgmental concept, on which reasonable people can easily disagree”.
He believed the FSA was increasingly forcing its view on firms.
“Businesses will be particularly concerned about the naming and shaming powers the FCA will have because the reputational damage that could follow a disagreement with the FCA will be very high indeed,” he said.
