One in five consumer credit ads breach FCA rules
It seems the FCA is indeed a grumpier sort than its predecessor, and much keener to rap the knuckles of unscrupulous firms. The FCA announced yesterday that out of 554 adverts for consumer credit that it examined last month, almost 20% were breaching the rules, with 108 falling short of the required standards aimed at protecting consumers.
Some examples were particularly scurrilous; cases where consumers were encouraged to hit the "apply" button before giving them important information about a loan, or those targeting children (yes, you read that right) by dishing out branded colouring-in sheets with pamphlets for high-cost, short-term loans. Other rule breaches included fraudulent claims of a miraculous instant credit-repairing loan, or one that magically removed previous debts, instead of replacing old debts with new ones.
Clive Adamson, director of supervision at the FCA, 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."
Almost 40% of the incorrect adverts were produced by payday lenders, many of which failed to give enough prominence to risk warnings. The FCA has said that 75 out of the 108 naughty firms have so far responded by amending or withdrawing their shoddy promotions. Presumably next months’ adverts will all be kosher…