The Financial Services Authority (FSA) has issued a warning to insurance firms regarding "misleading" savings claims in their advertising that cannot be substantiated. The financial services watchdog has threatened to take regulatory action against insurance companies who fail to stop making such claims.

The FSA carried out a review into press advertising from 57 companies. Their findings revealed that 57% of motor savings claim and 25% of home savings advertisements failed to provide any evidence as to how claimed savings would be achieved. The FSA said it was concerned that some ads give the impression that most consumers would qualify for the savings, when in fact most would be ineligible.

Vernon Everitt, FSA Retail Themes Director, said:

"Most people rely on some form of insurance to protect them and advertising is a major influence on what they choose to buy. So it must be clear, fair and not misleading, leaving people with a balanced picture of what's on offer. This work demonstrates that firms in the home, travel and car insurance markets must shape up and ensure that the claims they make don't mislead. We will be back in three months to assess progress and will then decide whether further regulatory action is needed."

Consumer group Which? has critised the FSA for failing to name and shame the firms involved. They believe the FSA should act more like the Advertising Standards Authority and publish details of the companies in order to incentivise the companies involved to improve their practices, and to keep consumers informed and protected.