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  1. Point in time
    2009-01-21

MCOB 3.8A Form and content of financial promotions of home reversion plans

Clear, fair and not misleading

MCOB 3.8A.1R

1A firm which communicates or approves a financial promotion of a home reversion plan must take reasonable steps to ensure that the financial promotion is clear, fair and not misleading.

MCOB 3.8A.2G

The guidance on the clear, fair and not misleading standard at MCOB 3.6.5 G, MCOB 3.6.10 G and MCOB 3.6.14 G may be relevant.

Note: A comparative financial promotion will need to comply with regulation 4A of the Control of Misleading Advertisements Regulations 1988.

Non-real time financial promotions to customers

MCOB 3.8A.3R

A non-real time financial promotion of a home reversion plan must:

  1. (1)

    describe any home reversion plan as a 'home reversion plan' and not use any other expression to describe it; and

  2. (2)

    unless it is communicated by way of sound broadcasting or television where the primary purpose of the programming in which the promotion is contained is not to promote home finance or by an exhibition of pictures or photographic or cinematographic films:

    1. (a)

      (if made to or directed at a customer other than an unauthorised reversion provider) prominently state that it relates to a home reversion plan and that the customer should ask for a personalised illustration to understand its features and risks; or

    2. (b)

      (if made to or directed at an unauthorised reversion provider) prominently state that a home reversion plan is a long-term investment and a complex legal arrangement, and that expert independent legal advice should always be obtained before entering into any agreement.

MCOB 3.8A.4E
  1. (1)

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

    1. (a)

      it includes any matters the omission of which causes the financial promotion not to be clear, fair and not misleading;

    2. (b)

      if it describes a feature of any home reversion plan, it gives no less prominence to the possible disadvantages than to the benefits associated with that feature;

    3. (c)

      it uses plain and intelligible language, and is easily legible (or, in the case of oral promotions, clearly audible);

    4. (d)

      the accuracy of all statements of fact in it can be substantiated;

    5. (e)

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

    6. (f)

      any statement of fact, promise or prediction is clear, fair and not misleading and any relevant assumptions are clearly and prominently disclosed;

    7. (g)

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

    8. (h)

      the facts on which any comparison or contrast is made are verified, or, alternatively, that relevant assumptions are prominently 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;

    9. (i)

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

      1. (i)

        the firm's independence; or

      2. (ii)

        the firm's resources and scale of activities;

    10. (j)

      the design, content or format does not in any way disguise, obscure or diminish the significance of any statement, warning or other matter which the home reversion plan is required by this chapter to contain;

    11. (k)

      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));

  2. (2)
    1. (a)

      Contravention of (1) may be relied on as tending to show contravention of MCOB 3.8A.1 R.

    2. (b)

      Compliance with (1) may be relied on as tending to show compliance with MCOB 3.8A.1 R.

MCOB 3.8A.5G

The effect of giving no less prominence to the possible disadvantages than to the benefits associated with a feature will depend upon the content of the promotion. The following non-exhaustive examples would satisfy the requirement:

  1. (1)

    a promotion which, when describing any possible monetary saving, also clearly states how this could be achieved; and

  2. (2)

    a promotion which, when including references to non-standard services or facilities, also clearly states that an additional fee may be payable for these.

No approval of real time financial promotions of a home reversion plan

MCOB 3.8A.6R

A firm must not approve a real time financial promotion of a home reversion plan.

Referring to the FSA

MCOB 3.8A.7G

The guidance on referring to the FSA in a financial promotion may be relevant (see MCOB 3.6.2 G (3)).