Financial Promotions Failings Loom Large
In two successive regulatory round-ups, FCA has highlighted the importance of CONC3 rules on financial promotions. While this has been directed at certain sectors, the regulator has the same expectations of all.
In November the FCA regulatory round-up included a reminder to Motor Finance Firms.
“Our Financial Promotions team has intelligence that some motor finance firms are not complying with our rules in CONC 3 … particularly in relation to posts on social media platforms.”
“… We encourage firms to … revisit CONC 3.3.1R, CONC 3.5.3R, CONC 3.5.5R, CONC 3.5.7R, CONC 3.7.5R and CONC 3.7.7R …”
Now in December, under the title “Furniture companies failing to comply with CONC 3 rules”, the FCA has stated the following:
“We have seen examples where furniture companies are not complying with CONC 3, which sets out the FCA rules around firms’ financial promotions, particularly for websites. Some websites offer ‘0% Interest Free Credit’ but fail to state the minimum spend required (and in some cases, the offer appears alongside products which are cheaper than the minimum spend).
Some sites offer payment options including cost of credit, triggering the requirement for a representative example, but this is not included. Some fail to contain a prominent credit broker statement.”
Clearly the FCA has concerns in the apparent failing of many firms in making adequate provision under CONC3. These latest updates underline that getting financial promotions right is a critical component of being compliant.
The over-arching principle of CONC3 is that financial promotions are clear, fair and not misleading. This includes specific rules relating to how offers are displayed and how terms are presented. There is also a basic requirement for firms to correctly state their name, whether they are a broker and who the lender is.
If you have any concerns about how CONC3 applies to your business, and what you need to do to ensure compliance, please get in touch with us today.