Whereas the overall number of complaints concerning banking & finance was down year on year, the number of complaints about misleading financial marketing practices marked a rise.
Deceptive marketing practices of financial products and services constituted a problem for France’s consumers in 2016, at least this is what the latest data by France’s General Directorate for Competition Policy, Consumer Affairs and Fraud Control (DGCCRF) shows.
In its “Consumer Complaints Barometer for 2016”, out today, the regulator which is a part of is a part of the French Ministry for the Economy and Finance, notes a rise in the number of complaints concerning marketing of financial products and services.
In 2016, DGCCRF received 2,190 complaints concerning banks and other financial services providers – they accounted for 3.2% of the total. The news is not so bad, as the number is down 12.1% year on year.
The two main reasons for filing a complaint about banking & financial services were fraud and deceptive marketing practices. Financial fraud complaints amounted to 347 (15.8% of the total), down 36.1% from 2015 levels. The complaints about deceptive marketing practices accounted for 12.3% of the total, or 270. They, however, were up 5.9% from 2015 levels.
The data is released just several months after France welcomed the Sapin 2 law, which prohibits the advertising of high-risk financial products such as binary options and CFDs with high leverage. Apparently, the ban was necessary given the higher number of complaints about misleading advertising.
How the Sapin 2 law will be implemented with regards to the harmful products is a separate topic of discussion. Thus far, a number of binary options brokers have brushed off the legal ban on partnerships with sports teams: these partnerships are prohibited if they result in advertising of high-risk financial products.
While regulators report a rise in complaints about binary options and Forex fraud and voice their concerns about manipulative marketing techniques used by sales teams of online trading companies, advertisers seem to be less worried about these developments. In fact, according to the Annual Activity Report for 2016 issued by France’s advertising self-regulatory organization ARPP, advertising of financial products was not among the key topics for the body last year.
ARPP’s Jury of Advertising Ethics (also known as JDP) issued 51 opinions in response to complaints received in 2016. Out of these, non-compliance with financial products advertising regulations was the motif for only one decision. Moreover, ARPP claimed that advertising in France is overly regulated and that the new rules for financial products ads simply add to the burden.