Financial Conduct Authority 

FCA warns of misleading adverts for over-50s life cover

FCA warns of misleading adverts for over-50s life cover

The Financial Conduct Authority has warned it is aware of life policy promotions for the over-50s which misled consumers into thinking they were buying a policy which will cover funeral costs in their entirety.

In a statement on its website yesterday (January 17) the regulator said its financial promotions team had seen evidence of such adverts and cautioned if a firm referred to "funerals and associated costs" it was important consumers were not misled into believing they were purchasing a plan which covers the costs in full.  

The FCA said over-50s life policies were widely promoted through various media channels and often guaranteed to provide cover without the need for a medical examination.

The watchdog warned if a firm’s advert includes product features or benefits, these must be presented in a "fair, clear and non-misleading" way, taking into account the "target audience".

The FCA urged providers to refer to guidance issued by the Association of British Insurers when designing funeral plan promotions. 

In its initial guidance on over-50s plans published in 2012, the ABI advised any marketing material should make it "crystal clear" to potential customers that the plan is an insurance policy and not a savings plan.

The trade body also warned where a promotion or marketing material included particular product features or benefits they needed to be balanced with a prominent warning about applicable risks, such as inflation and over-payment. 

Earlier this month the regulator warned some regulated firms, which undertake both regulated and unregulated business, were issuing financial promotions which falsely implied all of their activities were regulated by the FCA or the Prudential Regulation Authority.

Andrew Bailey, chief executive at the FCA, said these financial promotions were unlikely to provide consumers with the "clarity" required by FCA rules and could leave consumers "unable to understand" whether the promoted products or services were regulated. 

rachel.addison@ft.com

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