Deceptive marketing – new principled decision from the Danish Financial Supervisory Authority

Date 18 nov. 2008
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In a principled decision of 10 November 2008, the Danish Financial Supervisory Authority criticises a co-operative bank for using deceptive marketing to promote its products.


The case in brief

The Financial Supervisory Authority became aware of the co-operative bank’s advert through the publication in a printed media in October 2008 entitled Pension og Forsikring (Pension and Insurance) in which the bank marketed its product, a unique loan financed pension scheme. Among other things, the bank advertised that “the calculation looks like this per million in savings” and that the investment was “completely risk-free”.


Rules applying on good practice for financial businesses

It is stated in Section 4(2) of Executive Order no 1222 of 19 October 2007 on good practice for financial businesses (“The Executive Order”), that marketing which in its content, form or approach is deceptive, aggressive or subjects the customers to unjustifiable influence and which is aimed at changing their economic behaviour, is illegal.


The Decision of the Financial Supervisory Authority

In the specific case, the Supervisory Authority assessed that the kind of marketing used conflicted with Section 4 of the Executive Order.


The reasons given was that the marketing methods used were deceptive as the product was presented as risk-free and as the bank’s calculation example was based on a one- year-period whereas the scheme had a currency of 10 years.

With the principled decision of the Financial Supervisory Authority, it has been determined that marketing a financial product, in the shape of a loan financed pension scheme, as being completely risk-free is illegal. Moreover, the Supervisory Authority has determined that marketing a loan financed pension scheme by using a calculation example based on a one-year-period, when the scheme marketed has a currency of 10 years is also in contravention of the provision in Section 4 of the Executive Order. Marketing must give the customer a clear and realistic picture of the financial risks involved throughout the currency of the scheme.


If you have questions regarding the above or require additional information on marketing of financial products, please contact attorney Dan Moalem (


The above does not constitute legal counselling, and Moalem Weitemeyer Bendtsen does not warrant the accuracy of the information. With the above text, Moalem Weitemeyer Bendtsen has not assumed responsibility of any kind as a consequence of a reader’s use of the above as a basis of decisions or considerations.