What are financial promotions?
Financial promotions can take the form of a website, Facebook post, tweet, etc. Showroom point of sale and vehicle decals/ graphics would also be considered financial promotions if they include an invitation or inducement to engage in consumer credit activity. They can form a significant part of a consumer’s product knowledge, and can influence a consumer’s decision making when choosing a product.
What is the FCA concerned about?
Some motor finance firms are not complying with FCA rules in CONC 3. This is particularly in relation to posts on social media platforms such as Facebook, Twitter and Instagram. The main issues the FCA have seen include:
- not displaying a representative example when triggered
- not making the representative APR prominent
- not mentioning the legal name of the firm
- not displaying or a lack of prominence of the credit broker statement
- displaying monthly costs for a vehicle without indicating whether this is based on a credit or hire agreement
The FCA has also drawn attention to its Social Media Guidance - which looks at how the FCA supervises financial promotions in social media.
What action can the FCA take?
Whilst the FCA does not approve advertising and it is up to firms to ensure that financial promotions are compliant, the FCA does monitor adverts across different media in the UK. The FCA has the legal power to ban a financial promotion or advert that is unclear, unfair or misleading. It can also fine the firm and request it writes to its customers who may have been misled.