Consumer credit firms must raise advertising standards - FCA

clock

The Financial Conduct Authority (FCA) has uncovered widespread shortcomings in consumer credit promotions, such as payday loan advertisements.

About one in five of 500 promotions reviewed by the regulator 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Of the 108, 75 firms have responded, all of whom have amended or withdrawn multiple promotions.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'."

More on Regulation

PDG responds to FCA Market Study update

PDG responds to FCA Market Study update

Expanded terms of reference

Cameron Roberts
clock 31 March 2025 • 2 min read
Banning commission is an 'extreme' outcome of Protection Market Study: FCA

Banning commission is an 'extreme' outcome of Protection Market Study: FCA

Regulator tells delegates at COVER Summit North conference

Jaskeet Briah
clock 27 March 2025 • 3 min read
Building on the Friendly Society legacy

Building on the Friendly Society legacy

Response to Law Commission consultation

Andy Morris
clock 27 March 2025 • 4 min read

Highlights

COVER Survey: Advisers damning of protection insurer service levels

COVER Survey: Advisers damning of protection insurer service levels

"It takes longer than ever to get underwriting terms"

John Brazier
clock 12 October 2023 • 5 min read
Online reviews trump price for young people selecting life and health cover

Online reviews trump price for young people selecting life and health cover

According to latest ReMark report

John Brazier
clock 11 October 2023 • 2 min read
ABI members with staff neurodiversity policy nearly doubles

ABI members with staff neurodiversity policy nearly doubles

Women within executive teams have grown to 32%

Jaskeet Briah
clock 10 October 2023 • 3 min read