Printed Advertisements

Advertising in the UK is controlled by a patchwork of complementary and, sometimes, overlapping rules; some are voluntary codes, others are statutory regulations. Central to this patchwork is the British Code of Advertising Practice which comes under the aegis of the Advertising Standards Authority. The Code covers all printed advertisements whether, for example, in newspapers, magazines, on hoardings, posted through your door, or in leaflets in shops.

It lays down general rules which advertisements must follow in order to meet the central tenet that they be legal, decent, honest and truthful.

It includes a section applying to financial advertisements which deals with a number of more specific points.

The Code is voluntarily adopted by the advertising industry, but it's generally effective, because sanctions, such as adverse publicity or denying future advertising space, can be brought to bear on any offender.

The main drawback of the British Code of Advertising Practice is that it's couched in fairly general terms which don't always go far enough. Two areas which have traditionally caused difficulties are investments and loans. These are now covered by statutory controls - under the Financial Services Act 1986 and the Consumer Credit Act 1974, respectively. (Regulations under both these Acts go beyond printed advertisements and cover most other forms of advertising as well.) Where other industries have encountered problems they have adopted their own codes to supplement the provisions of the British Code of Advertising Practice - for example, this has happened with banks and building societies, particularly in relation to advertising their interest rates on savings accounts.

The general rules applying to all financial advertisements are:

- advertisements must be balanced, accurate and not likely to be misunderstood by those at whom they are targeted, including anyone who can't be expected to have any special understanding of the subject matter

- anything stated to be fact must be based on evidence available at the time of making, or publishing, the statement

- all promises and statements must be accurate and not misleading.

WARNING There can be widely differing views about what is misleading. For example, an advertisement for a type of deposit savings account claimed ... your capital is completely safe - the cash you put in is the cash you get back.' While it was true that the amount of ££s invested couldn't decrease, the buying power could be seriously eroded by inflation. Just five per cent a year inflation over a ten-year period would reduce the buying power of each £4,000 to a little over £610, and the real value of income earned by the deposit would similarly fall. However, the British Code of Advertising

Practice doesn't outlaw the expression 'completely safe' in this context, and legislation which would outlaw it doesn't apply to this form of savings.

Investments And Basic Rate Taxpayers

Selling Styles

There was a time when a fool and his money were soon parted; now it happens to everybody. Adlai Stevenson

A very obvious change in the financial scene of recent times has been the way in which its various products and services are marketed to the general public. No longer do you have to go along to your local bank or building society with your best suit on to ask for a loan, nor are you short of advice when seeking a suitable home for your savings. Today the financial world comes a-wooing whether you're an existing customer or not. Everything from loans to life insurance and unit trusts is... see: Selling Styles

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