Financial Watchdog Bites Over Misleading Ads

Watchdogs reckon hundreds of adverts put out to consumers by financial firms are misleading.

After looking at 1,500 adverts for consumer credit, the Financial Conduct Authority (FCA), investigators opened 227 cases for promotions that broke the rules.

The probes include adverts from payday lenders, debt management services and credit brokers.

The FCA revealed a quarter of the adverts cited failing to display a risk warning or details about representative APR.

More than 1,800 cases involved information on web sites, emails or text messages to consumers.

Informed decisions

The FCA said that the hundreds of misleading adverts included:

  • Debt management firms charging fees failing to state their services are not free
  • Promises of guaranteed loans regardless of the consumer’s credit history
  • Paid-for web links masquerading as free government services but charging a fee
  • A logbook lender quoted misleading APR information so consumers could not easily compare prices and also implied their service was ‘FCA endorsed’

Clive Adamson, director of supervision at the FCA, said: “The rules about promoting financial services are there to help consumers make informed decisions before entering into any contract.

Raising standards

“Unclear and misleading adverts do not help consumers and the FCA is disappointed to see financial firms offering credit falling far short of the standards we expect.

“These firms should understand we expect better from them and will take steps to raise standards.”

Adamson added that most firms contacted by the FCA over their advertising took quick action to rectify any problems.

The FCA took over responsibility for monitoring how financial firms promote their service from April 1, 2014.

Warnings about bogus advisers

Dealing with an unregulated firm

If you buy shares, save money or invest with an unregulated firm, you lose any protection offered by the Financial Ombudsman and the Financial Services Compensation Scheme. Broadly, you have no independent place to complain if the deal goes wrong and are unlikely to win any compensation.

Checking if a firm is regulated

Go to the Financial Services Register to check if a firm is regulated in the UK.

Reporting a suspected bogus adviser

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