FCA actively influencing changes, starting with Payday
The FCA( Financial Conduct Authority) has uncovered widespread shortcomings in consumer credit promotions, such as payday loan advertisements.
About one fifth of approx 500 promotions reviewed either omitted important information about the products or made it difficult to find.
The FCA assumed responsibility for the regulation of the consumer credit sector on 1 April.
Its rules state any advert must be clear, fair and not misleading for consumers.
The FCA examined over 500 advertisements for a range of consumer credit products and uncovered problems in 108 of them.
These included examples where consumers were encouraged to hit an ‘apply' button for a product before having a chance to access important information, a tactic which is against FCA rules.
Other examples which did not meet the regulations included firms:
Targeting young audiences with promotions for products that consumers must be over the age of 18 to use, such as distributing branded colouring-in sheets with their pamphlets for high-cost, short-term loans,
- Claiming that their product would help repair credit ratings,
- Claiming a product will clear a customer's debt, when in fact it is just substituting one debt for another.
Of the 108, 75 firms have responded, all of whom have amended or withdrawn multiple promotions. The remaining firms are in the process of responding.
FCA director of supervision Clive Adamson said: "It is particularly important in this sector that advertisements for financial products enable customers to make informed decisions. We think that more can be done to ensure that advertisements are fair, clear and not misleading.
"Firms have responded well when challenged about ads which have not met the standards. We will continue to work with firms and monitor their performance in this area to ensure the high standards we are looking for are met'