FCA reprimands credit firms for producing misleading ads
The Financial Conduct Authority (FCA) on Friday reprimanded consumer credit providers for using irresponsible adverts that lack key information and mislead consumers.
The FCA, which took over responsibility for the financial sector in April, stressed that adverts must be clear, fair and not ambiguous/misleading for consumers.
Analysis of more than five hundred adverts by a range of consumer credit providers revealed that one in every five (20 per cent) fells short of standards.
In some financial products, the City regulator found the "apply" button for a product before access to important information, an illegal tactic to encourage consumers to purchase the product.
Clive Adamson, head of supervision at the FCA, emphasized that advertisements for any financial product must enable consumers to make an informed decision.
Speaking on the topic, 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."
Of the total number of misleading adverts, 38 were published by payday lenders, several of which didn't give adequate prominence to risk warnings.
The City regulator also mentioned that 75 consumer credit providers have already amended or withdrawn their adverts that fell short of standards.