Britain’s Financial Services Authority has set up a hotline for the public and firms to blow the whistle on misleading financial product advertisements.

The FSA says that the new hotline is part of the FSA’s commitment to put significantly more resources into the regulation of financial advertising, including setting up a new department which will lead the efforts to stamp out misleading advertising.

The new department will increase monitoring of the internet, TV and direct mail as well as national and regional newspaper ads. The rules require ads to be straightforward about the benefits and the risks of the investment by making it clear what the product is and by not hiding charges or making unrealistic headline claims. The FSA is also setting up a specialist team that will undertake visits to firms to check whether their systems and controls around financial promotions are adequate.

The regulator says that consumer research shows that advertising can have a significant influence on a decision to buy a financial product. Last year more than £683 million was spent on financial advertising in UK newspapers and TV alone.

In the past year the FSA has dealt with 580 advertising-related cases with 359 different firms. In some cases it has asked firms to amend or withdraw their advertisements or even offer customers their money back, while in more serious cases the FSA may also take enforcement action, which can lead to a fine and/or the public naming of the firm.

“Hundreds of thousands of financial adverts appear every year on TV, radio and in the press,” said Anna Bradley, FSA Director of Retail Themes. “To help us put an end to misleading ads we need the eyes and ears of the public. The Hotline will make it much easier for consumers and firms to report on adverts they believe flout the rules and will enable us to act quickly and if necessary remove the offending material before someone loses out.

“We hope that firms will make use of the new hotline, as well as consumers. Consumers can pay a heavy price when they buy a financial product as a result of a misleading advert. But the industry also pays a heavy price when their reputation is damaged because one firm makes an inflated claim to gain advantage over their competitors.”