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COMMENT
Although I never watch "reality TV" programmes, I see that a new series of Celebrity Big Brother starts this week. At the very least, it will keep a few D-list personalities off the streets for a few weeks! To be honest, I'm cynical about Britain's peculiar obsession with all things celebrity-related. When I see "Jordan" in a newspaper, I expect to read about the Middle East! What's more, celebrities can do a great deal of harm, especially when they enter the financial arena. I find it utterly bizarre that the public is expected to trust a financial product and its provider simply because said product is being advertised by someone who has appeared on the telly. Granted, if this person actually had some financial credibility of their own, then you could understand this tactic. However, financial advertisers are prepared to use any old personality to promote their wares, even if this person has no financial nous whatsoever. Furthermore, celebrities expose themselves to considerable reputational risk by promoting products with which they are not familiar. For example, Lesley Ash, Carol Smillie and June Whitfield all came a cropper when advertising investments to older viewers on behalf of AXA Sun Life. Financial regulator the Financial Services Authority (FSA) ruled that these adverts and their accompanying literature were "unfair, unclear and misleading". The FSA reprimanded AXA Sun Life for breaking the rules governing the promotion of regulated financial products (affecting around 200,000 customers) and rewarded the firm with a £500,000 fine. Oops! At least Firstplus Financial Group is canny enough to use the mathematically minded Carol Vorderman to promote its loans. However, if Ms Vorderman looked a little deeper, she might think twice about advertising variable-rate secured loans and second mortgages. As I warned in Lessons From The Last Housing Crash, lenders are only too quick to repossess unsophisticated borrowers' homes when the chips are down. So, one of my Golden Rules of Money Management is: "Never buy any financial product which is promoted by a celebrity". Also, when it comes to children's savings plans, this broadens to include "or cartoon character". At the very least, someone's got to pay the talent's appearance fees, and that person is, of course, the poor customer! Got a complaint about a financial ad? Call the FSA hotline on 0845 7300 168. More: Fed up with poor products? Try these great 0% credit cards, savings accounts and low-cost investments!
