Have you received a ‘Dear CEO’ letter from the FCA about financial promotions?

Feb 1st '23

The Financial Conduct Authority (FCA) are increasing their focus on customer outcomes, not only at point of sale but also in how the customers are attracted to firms in the first place, with emphasis on a good customer journey leading to fair outcomes.


As such, on May 6th 2022 the FCA sent a ‘Dear CEO letter‘ to Credit Brokers and providers of High Cost Lending products, advising of its concerns around financial promotions and advertising. Their concerns centre around providers of credit and their credit brokers exploiting vulnerable customers and those impacted by the cost of living crisis, who may have an urgent need for credit. The FCA is concerned about the risk of firms exploiting this current environment to promote their business in a way that targets vulnerable customers, or makes unfounded claims about the availability of credit and likelihood of acceptance.


The principle concerns outlined in the letter are:


  • Terms such as “no credit check loans”, “guaranteed loans” and “pre-approved”
  • Credit Brokers implying that a Lender will not undertake any checks or credit reference agency search
  • Breaches of CONC 3.3.1R relating to the financial promotions being “clear fair and not misleading
  • Breaches of CONC 3.3.3R implying guaranteed acceptance or credit being available regardless of circumstances
  • Breaches of CONC 5, responsible lending
  • Breach of CONC 3.4.1R, Financial Promotions for HCST credit not including the required risk warnings
  • Incorrect RAPR being used, ie ignoring the ‘51%’ rule
  • Financial Promotions for Credit Brokers not stating their Broker status


This is a summary of the chief concerns. What the FCA are expecting all firms in receipt of this letter to do is conduct a full review of their systems and processes relating to Financial Promotions, and recommends that a documented record of this review is retained. As we have previously seen, where the FCA ‘recommend’ action it’s usually a good idea to follow their suggestion.


FCA also state that, in undertaking this review, the list of issues they have identified should not be seen as a definitive list of the CONC 3 rules.


So what does this all mean? Well, in short any firm in receipt of this letter should be undertaking an end to end review of it’s processes around the creation, approval and launching of any advertising and financial promotions, including social media, Google paid ads, and advertising undertaken by Appointed Representatives.


LS Consultancy is ideally placed to support firms of all sizes and types with this Financial Promotions review.


We are offering a no obligation 30 minute video conference consultation free of charge to any firm that is looking for help or guidance with the issues and suggested actions contained in this letter. The consultations are on a first come first served basis and can be conducted after hours if desired, so as not to impact on your working day.


Get in touch today to book your free consultation. What do you have to lose? The best that will happen is you get some useful tips and guidance on how to deal with the issues in the letter, the worst that can happen is you spend 30 minutes with a Compliance Consultant with over 20 years experience in the industry.


We look forward to speaking with you


Related: Financial Promotions: CONC Introduction


Need some promotional advice? If you want to understand more about how to make sure your marketing materials meet FCA standards, please click here.


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