This page analyses the latest data, from 1 October 2022 to 31 December 2022, from Financial Conduct Authority (FCA) action taken against authorised firms breaching financial promotion rules and referrals and investigations into unregulated activity.
The data gather means the FCA can monitor developments in the market, get insights into sectors they have concerns about and act to prevent consumers from harm.
What’s included in the data
- key messages for regulated and unregulated financial promotion activity
- number of financial promotions reviewed during this period
- number of closed cases where promotions have been amended and withdrawn including split across sectors, and excluding cases which are still ongoing
- number of unauthorised reports received and alerts issued
- how the FCA act
- In 2022 Q4, reviewed 870 promotions.
- Our intervention resulted in 3,973 amends/withdrawals.
- Retail lending (with 53%), retail investments and general insurance & protection are the sectors with the highest amend/withdraw outcomes, amounting to just over 80% of our interventions with authorised firms.
- Some of the most common breaches involved credit brokers, life insurance providers and various investment providers.
- In 2022 Q4, we issued 531 alerts about unauthorised firms and individuals, with 10% of these related to clone scams.
- We also supported the Early and High Growth Oversight Department by providing a webinar training session to around 500 attendees, to remind firms of our financial promotion’s rules.
Number of promotions reviewed
In 2022 Q4 the FCA reviewed 870 financial promotions from multiple sources.
- 65% from proactive monitoring
- 13% from consumers
- 9% from different areas of the FCA
- 8% from UK Regulators
- 5% from firms
Table 1: Number of cases with interventions and amend/withdraw outcomes
- 3 Voluntary Applications for Imposition of Requirements (VREQs) were approved, restricting the firms’ ability to communicate or approve financial promotions
- 1 Undertaking and Attestation
- 3,973 promotions were amended or withdrawn following our intervention with 42 authorised firms
- 69% of these involved website or social media promotions
Graph below shows the split across sectors.
The FCA expect authorised firms issuing and/or approving financial promotions to take responsibility in making sure all communications of financial promotions are clear, fair and not misleading and otherwise comply with our relevant rules.
This can also include oversight of appointed representatives, or introducer appointed representatives, and marketing across all media platforms such as websites, paid for Google ads and social media sites.
The FCA will continue to intervene swiftly and assertively against authorised firms that make non-compliant financial promotions.
To show how the FCA bring these principles to life, set out how they intervened in 4 cases.
#1 Misleading and unclear promotions by credit broker firm
The FCA identified a credit broker firm who was including statements such as ‘’Bad Credit? No Problem‘, ‘CCJ’s? Poor Credit? We can still help!’ within its promotions which mislead consumers to believe credit is available regardless of their financial circumstances.
In addition, the firm’s promotions included cost of credit information without including the required representative example, as well as missing the representative APR and credit broker statement. We had concerns regarding misleading statements implying immediacy of funds. The firm was also found to be using its FCA regulatory status in a promotional manner.
- Action taken
Given the breaches and the potential vulnerability of consumers searching for a loan where they have bad credit, our intervention led to us agreeing to the imposition of a voluntary requirement (VREQ) that the firm amend or withdraw all financial promotions that fail to comply with the relevant handbook rules.
FCA intervention resulted in 32 promotions being amended across social media and the firm’s website.
#2 Misleading and unclear promotions by credit broker firm
The FCA identified a credit broker firm who offered high-cost short term credit however the required risk warning was lacking prominence as it was at the bottom of the website and could easily be overlooked by a consumer.
In addition, the firm’s website included a title tag which produced an organic Google search result with the headline of ‘No Credit Check’ which would have misled consumers to believe no credit check would be performed.
- Action taken
Given the breaches and the potential vulnerability of consumers searching for a credit check free loan, intervention led to the FCA agreeing to the imposition of a voluntary requirement (VREQ) that the firm amend or withdraw all financial promotions that fail to comply with the relevant handbook rules.
Intervention resulted in 1 promotion being amended.
#3 Misleading and unclear promotions by consumer credit lender firm
The FCA identified a consumer credit lender firm that was using its FCA regulatory status to imply that it was ‘Super Secure’ on its website. The firm were using its FCA status in a promotional manner and therefore misleading consumers with regards to the security of its services.
The firm’s website also lacked balance; its landing page contained the benefits of its service without detailing the risks. In addition to this, some of the firm’s social media ads included cost of credit information without displaying the required representative example.
- Action taken
FCA intervention resulted in 22 promotions being amended across social media and the firm’s website.
#4 Misleading and unclear promotions by credit broker firm
The FCA identified 2 Introducer Appointed Representatives (IARs) of a credit broker firm. Collectively they were breaching the financial promotions rules in their Google ads, email promotions and on their websites.
The breaches included the IARs offering high-cost short-term credit without including the required risk warning or the risk warning lacking prominence. Also, the inclusion of an incentive to apply without including a representative APR, as well as missing the credit broker statement. The FCA also had concerns regarding misleading claims regarding the immediacy of the provision of loans.
- Action taken
FCA intervention resulted in the firm conducting a full review of its IAR’s financial promotions, 70 promotions being amended and 8 IAR relationships being terminated.
#5 Misleading and unclear social media promotions by an asset management firm
The FCA identified 3 Appointed Representatives (ARs) of an asset management firm. Their financial promotions, which were across several social media platforms including, YouTube, Facebook, Instagram, mobile applications and one of the firm’s websites, were breaching the financial promotions rules.
The website breaches included an unfair, unbalanced and unrealistic comparison chart, an unclear and misleading statement regarding fees and the future performance warning lacked prominence.
In addition to this, on YouTube and Instagram, they were using influencers who weren’t being clear about potential fees and the risk warnings lacked prominence. On the Facebook promotions and via In-app push notifications, there was also no risk warning and again the issue of being unclear regarding fees.
- Action taken
Intervention resulted in the firm conducting a full review of all its ARs financial promotions and 319 promotions being amended across multiple media channels.
#6 Misleading and unfair promotions by wealth management firm
The FCA identified a wealth management firm who was promoting giving consumers an investment boost or points for transferring ISAs, pensions, Junior ISAs and Child Trust Funds to their firm.
FCA were concerned that the rewards related to a time-limited offer and the end date at the time the promotion was being actively promoted, would not have given consumers sufficient time to consider an important decision such as transferring their pension.
In addition to this, as part of this promotion, the firm used the maximum reward amounts as headlines which created a misleading impression of the level of reward that the majority of consumers will actually receive.
- Action taken
Intervention resulted in the firm withdrawing all promotions that related to the time limited offer and with 49 promotions being amended or withdrawn.
#7 Misleading and unclear promotions by providing credit information services
The FCA identified a credit information services firm whose promotions lacked balance as they did not include any indication that a consumer’s credit score may not improve and that there was no guarantee of a consumer getting a better score.
In addition, the consequences of missed payments lacked prominence on the firm’s promotions.
- Action taken
Intervention resulted in 169 promotions being amended or withdrawn across multiple media channels.
#8 Misleading and unclear promotions by e-money issuer
The FCA identified an e-money firm who was promoting its services as being similar to a bank but failed to adequately disclose the differences in protections between e-money accounts and bank accounts.
In addition, the firm was using its FCA regulatory status in a promotional manner. Its monthly fee information lacked prominence and it was making misleading claims.
- Action taken
Intervention resulted in 97 promotions being amended or withdrawn across social media, Google and the firm’s website.
Number of reports received
In 2022 Q4, we received 6,374 reports about potential unauthorised business.
Issued 531 alerts about unauthorised firms and individuals. Just under 10% of these were about clone scams. This is where fraudsters often use details such as the name and address of authorised firms and individuals, and a ‘firm registration number’ (FRN) to suggest they are genuine. Many of these involved breaches of the financial promotion restriction online. In almost all cases the FCA asked for the websites to be taken down.
Scammers continue to target consumers searching for investments online, through social media such as Instagram, YouTube or Tik Tok.
The FCA has continued to see a trend in unauthorised social media influencers and bloggers making illegal promotions which seek to persuade consumers to invest in high risk, volatile products which are inappropriate for the consumer being targeted. Products and services being offered vary but examples we have identified included:
- promotions of loans or some form of credit to students struggling with their finances
- posts about get quick rich FX trading schemes
- videos providing either trading signals or copy trading information to entice consumers to sign up to a trading package being offered by the blogger
In the cases where they identified an unlawful promotion, the FCA published a consumer alert and requested the social media platform hosting the harmful content to remove it. They are working closely with other regulators to educate fin-fluencers about their obligations when seeking to promote financial products or services. The FCA want to remind fin-fluencers that when advertising to consumers through their social media channels they could be breaching the Financial Services and Markets Act 2000 (FSMA) by issuing illegal financial promotions which entice consumers to invest money they cannot afford to lose and to think carefully before endorsing or promoting financial products.
The FCA is increasing efforts to hold social media companies to account for illegal content identified on their platforms. They have increased capability to search across social media to identify illegal financial promotions faster and in larger volume. When the FCA find this content, they provide this information to the relevant platform with the clear expectation that they:
- remove it
- improve their own controls to stop such content being promoted to their customers in the future
Targeting of UK consumers with high-risk products
The FCA has continued to take swift action to stop unauthorised promotions which are commonly issued outside the UK, but which seek to target UK retail consumers with a variety of high-risk products. Many of these promotions are scams but a consistent theme in the promotions that they’ve acted against are that they downplay or make no reference to the substantial risks involved in the investments being promoted. The promotions are typically made in websites, but they have also received several reports of consumers being targeted through emails sent to their personal emails. The most common products/services featuring in these promotions have been FX, CFDs, futures and, to a lesser extent, binary options. These are often promoted alongside other products that fall outside the FCA’s remit, in particular crypto assets and NFTs. For example, over 320 of the alerts issued in the last quarter included a promotion about FX or CFDs and over 220 promotions appeared on sites which also promoted investments in crypto assets.
Unauthorised collective investment schemes (UCIS)
The FCA has seen a slight increase in the number of UCIS being promoted to UK consumers. UCIS are high-risk investments and cannot be promoted to the general public in the UK. Recent cases reported to us have involved investments in hotel rooms and investments in nursing homes. These investments are often promoted on the basis that they are more secure because they involve investing in a physical property (such as a hotel, student accommodation or a retirement home). However, UCIS are sometimes scams and they often have a high risk of failure especially where the property investment being promoted has yet to be built or has only recently been established. The regulator currently has 6 open enquiries into suspected UCIS. Where appropriate, in addition to stopping further illegal promotions, the schemes may need to be restructured or unwound altogether so that remaining sums can be repaid to consumers.
How the FCA act
For authorised firms, we use a range of tools. These include the imposition of voluntary requirements (VREQs) or using our powers to impose own initiative requirements. The firm which has communicated or approved the advert is requested to withdraw or change it to comply with our requirements. In the most serious circumstances, we will use our powers under s137S of FSMA to ban a promotion or advert.
Where they see repeated non-compliance with FCA rules, they expect these firms to conduct more detailed reviews and provide reports on these findings, particularly on their systems and controls for their financial promotions. They may also ask firms to consider whether any customers may have acted on the non-compliant promotions and to take appropriate action to remedy any harm which consumers may have suffered as a result.
The FCA conduct proactive daily monitoring to identify websites containing illegal promotions and take prompt action by publishing an alert on their website, typically within 24 hours, requesting that the offending website is taken down.
They are continuing to develop our capability to identify more quickly, alert and request social media platforms take down unauthorised financial promotions. The FCA is engaging with social media firms, to identify, stop and remove illegal financial promotions on their platforms.
For firms and individuals identified as potentially acting outside of FCA perimeter, they have a range of tools including enquiries, challenging firms and individuals’ activities via technical correspondence and publishing consumer alerts on their website. The FCA escalate the most serious problems to the Unauthorised Business Department’s investigation teams, who can use powers under FSMA to commence civil, criminal and/or insolvency proceedings.
How to report a misleading financial advert or potential scam
Report a financial advert or promotion that you think is misleading, unfair or unclear.
Report a scam, authorised firm or individual to the FCA.
FCA casework with will usually involve confidential information for the purposes of section 348 of the FSMA. The FCA is therefore unlikely to be able to provide further information about particular cases. Find out more about the information they can share.
Download: Financial Promotion Guide
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