Credit groups in the doghouse after ads fall foul of FCA rules
THE CITY regulator is investigating more than 200 cases of product promotions, such as payday loans, debt management services and credit brokers, that may breach its rules on misleading customers.
The Financial Conduct Authority (FCA) said that of the 1,500 promotions it had reviewed since April, it had launched further investigation into 227 that it believed could have fallen short of its rules that promotions must be: “clear, fair and not misleading”.
“We are disappointed to see standards fall short of what we expect, particularly in the consumer credit space, four months from when we took over regulation,” said FCA supervision director Clive Adamson.
“We believe that firms in this sector can do more to ensure financial promotions meet the standards we would expect and will continue to monitor performance in this area.”
The FCA said one-quarter of the cases being investigated related to promotions for high-cost, short-term credit on websites, emails or text messages, where risk warnings on annual percentage rate (APR) of interest on the loan were not prominently displayed.
“It is important that all firms ensure financial promotions are fair, clear and not misleading so that customers are able to make informed decisions,” added Adamson.