Who: The Financial Conduct Authority (the “FCA“)
Where: United Kingdom
When: 13 August 2014
Law stated as at: 9 September 2014
Following a review of over 1,500 financial promotions for consumer credit products, the FCA has issued a press release noting that many firms are still falling short of the FCA’s rules and the overarching principle that all financial promotions must be “clear, fair and not misleading”. The press release also serves as a warning to firms that the FCA will continue to actively monitor financial promotions and take enforcement action as a means of raising standards across the market.
Why this matters:
The press release drives home the fact that the FCA are clearly focused on proactive supervision, actively monitoring financial promotions published across all forms of media and not shying away from taking enforcement action against firms who aren’t meeting the standards set by the FCA. The press release comes on the back of the FCA’s review of over 1,500 financial promotions for consumer credit products, a review which has also resulted in the FCA investigating 227 cases of non-compliant financial promotions. Interestingly, the FCA also notes that 80% of these cases under investigation relate to financial promotions communicated over digital media such as websites, emails and text messages – a hot topic of the FCA’s noting that the FCA published its guidance consultation paper (GC14/6) “Social media and customer communications” at the beginning of August 2014.
For firms keen to avoid obvious breaches of the FCA’s rules, the press release helpfully draws out examples of where firms have got it wrong:
• advertisements for debt management firms charging fees that failed to make it clear that their services are not free of charge;
• promotions that guaranteed credit was available regardless of the consumer’s financial circumstances; and
• internet search terms that directed consumers to unrelated sponsored links, for example a search for “government debt help” generated a sponsored link for a loan.
The press release can be viewed in full through this link.