The Financial Conduct Authority (FCA) has reported that some promotions for financial products are still falling short of its rules and firms need to do more to ensure that advertisements do not mislead consumers.

Since 1 April, the FCA has reviewed over 1,500 financial promotions for consumer credit products. The rules state that all promotions must be clear, fair and not misleading for consumers.

In the same period, the FCA has opened 227 cases about non-compliant promotions for products such as payday loans, debt management services and credit brokers. A quarter of these cases relate to advertisements for high-cost short-term credit, with many not prominently displaying a risk warning or representative APR. 80% of consumer credit cases to date relate to digital media, such as websites, emails and text messages.

Clive Adamson, director of supervision at the FCA, said: “It is important that all firms ensure financial promotions are fair, clear and not misleading so that customers are able to make informed decisions. We are disappointed to see standards fall short of what we expect, particularly in the consumer credit space, four months from when we took over regulation. We believe that firms in this sector can do more to ensure financial promotions meet the standards we would expect and will continue to monitor performance in this area.”

Examples of financial promotions which did not meet the regulations included:

• Advertisements for fee-paying debt management firms that did not make it clear that services are not free of charge
• Promotions that guaranteed firms would provide credit regardless of customers’ circumstances
• A logbook lender who provided misleading information about its APR, made unclear comparisons between its rates and those of other lenders, and implied its services were endorsed by the FCA
• Internet search terms that took consumers to unrelated sponsored links, for example, a search for ‘government debt help’ returned a sponsored link for a loan, potentially misleading people to believe the firm was offering government assistance when this was not the case.

Firms have responded positively when contacted by the FCA and have been quick to make changes to promotions that do not meet the standards. The FCA will continue to monitor financial promotions and take action where required to drive up standards. The FCA acts on complaints received from the public, the Advertising Standards Authority and other organisations.