Regulator's advertising rules overlook risks

As finances tighten, consumers are increasingly ready to complain about insurance and other financial products. Martin Lewis's MoneySavingExpert.com has more than seven million readers each month and more than 550,000 of them downloaded template letters to recover payments made for payment protection insurance based on inadequate information in the sales process.

Although formal enforcement action by the Financial Services Authority is down (just one public censure in 2008, against a mortgage broker for insurance promotions), it is clear that financial promotions are coming under increasing scrutiny, quite separate from whether or not they comply with the FSA's requirement that they be fair, clear and not misleading.

In 2008, the Advertising Standards Authority - the general advertising watchdog - received 320 complaints about 220 insurance promotions, according to figures obtained by Beachcroft. It is noteworthy that it was the ASA - rather than the FSA - that upheld complaints about the Iggy Pop Swiftcover advertising campaign; the same organisation was also responsible for one of GoCompare.com's campaigns being altered. The FSA has refused to say whether or not it will take action.

Using personalities - for example, the current campaign by Henderson New Star, which shows pictures juxtaposing Andy Warhol with Salvador Dali and Bob Dylan with John Lennon under the heading 'Imagine if they worked together' - is a risky area that the FSA's rules simply do not cover. Use of such imagery is subject to 'rights of publicity', which are still very uncertain under UK law but nevertheless vigorously pursued by the estates of the celebrities involved.

Equally, it can be surprising that many short tag lines are now the subject of trademark registration. Groupama astutely registered 'Big enough to deliver, small enough to care' as a UK trademark in 2005, causing Heath Lambert to change plans for a similar strapline in May. Such trademarks last indefinitely, provided the £200 renewal fees are paid every 10 years, so they are an attractive opportunity to own some simple yet catchy expressions.

Copyright law also means that use of insurers' logos on aggregator sites, or in advertising, is unlawful unless specific permission has been given, even where European Union rules on comparative advertising appear to allow such trademark usage.

It is clear that to approve any promotion needs a weather eye to a whole raft of unconnected laws and regulations. On the figures, compliance teams within insurance are evidently having a quiet time at the hands of the FSA on their financial promotions at present. However, agitated customers and competitors are increasingly using many other ways to challenge, leading to the embarrassing and expensive withdrawal of advertising campaigns based on factors that may simply have been missed by any clearance process that follows only the FSA's handbook.