FCA cracks down on 4,000 rogue financial promotions


INSIGHT
Published
Nov 15th '22
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The Financial Conduct Authority (FCA) recently released information about its revisions or withdrawals to more than 4,000 financial promotions from July 2022 to September 2022. The evaluations of 340 promotions led to this move. These figures are the highest since the FCA started disseminating such financial information.

 

We’ll be delving into the justifications behind the FCA’s intervention in this blog, as well as the industries dealing with the highest rates of changes or withdrawals: investments, retail lending, and banking.

 

  • Consumers are Being Tempted by High Risk Services

What, then, were the reasons behind the FCA’s extensive intervention? The executive director of enforcement & market monitoring at the FCA, Mark Steward, explained that given the current financial strains, many consumers are particularly vulnerable. Scammers depend on vulnerability after all, and consumers are more vulnerable than ever to being enticed by unregulated goods or services that carry significant, unaddressed danger.

 

Due to this, the FCA decided it was essential to refute false claims made in advertisements and alert consumers to the risks associated with these sneaky schemes. They have also kept using electronics and social media platforms, as those have a lot of influence over how much harm can be done online.

 

  • High Rates of Amendments in Retail Lending, Banking, and Investments 

Three industries—investments, retail lending, and banking—represent 95% of those impacted by the modifications and withdrawals to financial incentives. Of their interventions, 46% were to retail lending and 24% to retail investing. Retirement income and pensions made up 6% of the market, while retail banking made up 24%.

 

The FCA claims that a number of these cases involved unauthorised people or businesses that were intentionally taking advantage of the cost-of-living crisis.

 

  • FCA Relaunches ScamSmart Campaign 

Numerous customers had also been added to mailing lists, which scammers used to continue “advanced fee” or “loan fee” fraud. The FCA started writing to impacted consumers, and they also brought back ScamSmart because frauds of this nature have been more frequent throughout the cost of living crisis. This campaign is focused on specifically that kind of fraud in an effort to increase awareness among the weak.

 

How to Report Misleading Financial Promotions

The FCA  has highlighted the ways in which consumers can report financial advertisements they believe to be deceptive in the wake of recent initiatives. An online reporting form that you can use to alert the FCA to a promotion that seems to be out of compliance is available on their website. Include as much information as you can about the promotion.

 

The FCA will make a determination on whether a report is non-compliant once they have received it. If they do, they will recommend that the company change or withdraw the campaign, notify any customers they may have deceived, impose a fine or warning on the company, and finally, ban the promotion entirely.

 

By ensuring that all information is compliant and approved before it can be utilised, we can help you save time and money while lowering your risk. Contact us right  away to learn more.

 

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

 

Download: Financial Promotion Guide

 

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