Last week, the FCA banned a number of online adverts issued by a motor finance firm.
The firm, Rix Motor Company Ltd, had posts on its Instagram account and three of its websites banned for breaching FCA rules. The posts related to credit broking of car finance and the reasons given by the regulator were:
- representative examples of the cost of credit to the consumer were either missing from the advert or unlikely to be seen
- the advert didn’t make clear whether consumers were dealing with a credit broker or a lender
- the advert didn’t specify the legal name of the firm as it appears on the Financial Services Register so that consumers could easily check that Rix Motors was authorised
Following this, a timely reminder on financial promotions rules seems appropriate.
The FCA regulates advertising across most of the financial services – including insurance. Under the Financial Services and Markets Act 2000, the FCA has legal power to ban financial promotions.
Financial promotions (or adverts) can take many forms, including websites, social media (i.e. Facebook, Twitter) etc. Financial promotions may influence a customer’s decision making when choosing a particular product, so should therefore be used with caution. It’s important that customers are able to make informed decisions and are not mislead.
Financial promotions can form a significant part of a consumer’s product knowledge, and can influence a consumer’s decision making when choosing a product.
According to FCA guidance, all financial promotions must be clear, fair and not misleading regardless of the media type.
The FCA does not approve advertising and it is for firms themselves to ensure that their financial promotions are compliant. The regulator will, however, monitor adverts across different media in the UK and will take action where necessary – as this supervisory notice demonstrates.