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ICOB 3.8 Form and content of non-investment financial promotions

Clear, fair and not misleading: comparisons and restrictions on the use of the key facts logo

ICOB 3.8.1R
  1. (1)

    A firm must be able to show that it has taken reasonable steps to ensure that a non-investment financial promotion is clear, fair and not misleading.

  2. (2)

    A non-investment financial promotion which includes a comparison or contrast must:

    1. (a)

      compare contracts meeting the same needs or which are intended for the same purpose;

    2. (b)

      objectively compare one or more material, relevant, verifiable and representative features of those contracts, which may include price;

    3. (c)

      not create confusion in the marketplace between the firm itself (or the person whose non-investment financial promotion it approves) and a competitor or between the firm's trademarks, trade names, other distinguishing marks, contracts or services (or those of the person whose non-investment financial promotion it approves) and those of a competitor;

    4. (d)

      not discredit or denigrate the trademarks, trade names, other distinguishing marks, contracts, services, activities or circumstances of a competitor;

    5. (e)

      not take unfair advantage of the reputation of a trademark, trade name or other distinguishing marks of a competitor;

    6. (f)

      not present contracts as imitations or replicas of contracts bearing a protected trademark or trade name; and

    7. (g)

      indicate in a clear and unequivocal way in any comparison referring to a special offer the date on which the offer ends or, where appropriate, that the special offer is subject to the availability of the contracts and services, and, where the special offer has not yet begun, the date of the start of the period during which the special price or other specific conditions shall apply.

  3. (3)

    A non-investment financial promotion must not contain the key facts logo unless it is required by a rule.

ICOB 3.8.2E
  1. (1)

    A firm should take reasonable steps to ensure that, for a non-investment financial promotion:

    1. (a)

      its promotional purpose is not in any way disguised or misrepresented;

    2. (b)

      any statement of fact, promise or prediction is clear, fair and not misleading and discloses any relevant assumptions;

    3. (c)

      any statement of opinion is honestly held and, unless consent is impracticable, given with the consent of the person concerned;

    4. (d)

      the facts on which any comparison or contrast is made are verified, or, alternatively, that relevant assumptions are disclosed and that the comparison or contrast is presented in a fair and balanced way, which is not misleading and includes all factors which are relevant to the comparison or contrast;

    5. (e)

      it does not contain any false indications, in particular as to:

      1. (i)

        the firm's independence;

      2. (ii)

        the firm's resources and scale of activities; or

      3. (iii)

        the scarcity of any contract;

    6. (f)

      the design, content or format does not disguise, obscure or diminish the significance of any statement, warning or other matter which the non-investment financial promotion is required by this chapter to contain;

    7. (g)

      it does not include any reference to approval by the FSA or any government body, unless such approval has been obtained in writing from the FSA or that body (see also GEN 1.2 (Referring to approval by the FSA));

    8. (h)

      it does not omit any matters the omission of which causes the non-investment financial promotion not to be clear, fair and not misleading; and

    9. (i)

      the accuracy of all material statements of fact in it can be substantiated.

  2. (2)
    1. (a)

      Compliance with ICOB 3.8.2 E(1) may be relied on as tending to show compliance with ICOB 3.8.1 R(1).

    2. (b)

      Contravention of ICOB 3.8.2 E(1) may be relied on as tending to show contravention of ICOB 3.8.1 R(1).

Guidance on clear, fair and not misleading

ICOB 3.8.3G
  1. (1)

    It cannot be assumed that recipients necessarily have an understanding of the contract being promoted. If a non-investment financial promotion is specially designed for a targeted collection of recipients who are reasonably believed to have particular knowledge of the contract being promoted, this fact should be made clear.

  2. (2)

    In relation to quotations of opinion:

    1. (a)

      where only part of an opinion is quoted, it should nevertheless be a fair representation; and

    2. (b)

      any connection between the holder of the opinion and the firm should be made clear.

  3. (3)

    Firms should avoid the use of small print to qualify prominent claims.

  4. (4)

    If a firm communicates a non-investment financial promotion which contains a quotation of premium and it is unable to give the retail customer a precise quotation it should ensure that the premium quoted is representative of the premium that would be charged for a person in a similar position to the retail customer.

  5. (5)

    Unless the firm is prepared to give a precise quotation, the non-investment financial promotion should be accompanied by a prominent statement making clear that the premium quoted is an estimate only and that the actual premium will depend on individual circumstances.

  6. (6)

    Where a non-investment financial promotion indicates or implies that a firm can:

    1. (a)

      reduce the premium; or

    2. (b)

      provide the cheapest premium; or

    3. (c)

      reduce a retail customer's costs;

    it should include, with equal prominence, a statement of the basis on which the reduction is to be achieved. The FSA will assess prominence in the context of the non-investment financial promotion as a whole. Use can be made of the positioning of text, background and text colour and type size to ensure that ICOB 3.8.1 R(1) is satisfied.

  7. (7)

    Where (6) applies, and there are significant limitations on any savings, these should be given equal prominence in the non-investment financial promotion to the claimed savings. For example, if the non-investment financial promotion states that a firm can achieve a premium reduction in the form of either a percentage or monetary amount, but the saving is only available if the retail customer meets certain specific criteria, the criteria should be given equal prominence and not placed in small print.

  8. (8)

    A firm which offers general insurance contracts, providing benefits for the customer's care in the event of the customer's disability or incapacity, should avoid using terms which state expressly or imply that the policy will be available for the customer to claim on in the long-term, that is, for any period beyond the expiry of the policy. So a general insurance contract should not be promoted as being capable of providing long-term care insurance for the customer in the long-term, and expressions such as "long-term care" and "lifetime care" should generally be avoided in relation to general insurance contracts. If a general insurance contract provides benefits over the long-term in the event of a claim being made, a firm should make clear that the long-term aspect relates only to the availability of benefits in the event of a claim, not to the duration of the policy itself.1