Financial News

  • 18 May 2014, 1:06

Credit Firms Warned Over Misleading Adverts

The Financial Conduct Authority (FCA) has demanded that consumer credit firms, including payday lenders, comply with its rules on advertising.

The FCAhas revealed that more than 20% of the adverts it examined failed the set criteria.

The watchdog, which assumed regulatory responsibility of the sector in April, said it reviewed 500 advertisements from companies and found 108 did not meet its expectations.

The FCA said many of the offenders made changes after it complained, however more than 30 of the firms still had not made alterations.

It said it found firms encouraged consumers to hit "apply" buttons for products before having a chance to access important loan information.

The tactic was against its rules, and further scrutiny of the sector would occur, it said.

The FCA acts on complaints from the Advertising Standards Agency, consumer complaints and its own surveillance.

Scrutiny would continue for online, direct mail, print and in-store promotions.

Lenders, and in particular payday firms, have come under increased pressure for their sales techniques.

Payday lending has become a political hot potato because of the potential for customers unable to repay short-term debt being hit with extraordinarily high interest rates.

Advertisement