The Financial Conduct Authority (“FCA”) has published its latest quarterly data of actions they have taken against authorised firms breaching financial promotion rules and referrals and investigations into unregulated activity.
Each quarter the FCA publish data demonstrating the work they do to proactively monitor financial promotions and investigate complaints and referrals, including;
- Number of financial promotions reviewed between during quarter 3 of 2022
- Investigations into regulated and unregulated financial promotions
- Number of concluded cases where promotions have been amended/ withdrawn
- Actions taken by the FCA due to breaches of financial promotion rules
This recent insight collected data between 1st of July and 30th of September 2022.
During quarter 3, the FCA reviewed 340 promotions which came to the FCA’s attention through a variety of sources. These included;
- Consumers- 39%
- Regulated Firms- 22%
- Within other FCA departments- 20%
- Other UK regulators- 17%
- Proactive monitoring- 2%
During the period, a total 4,151 promotions were amended or withdrawn. Retail lending were amongst the sectors with the highest number of withdrawals/amendments with a total of 46% of engagement. Retail lending, along with retail investments and retail banking amounted to 95% of the FCA’s interventions of authorised firms. Credit brokers were amongst some of the most common breaches along with e-money providers and CFD providers. In 2022 Q3, the regulator issued 303 alerts about unauthorised firms and individuals, with 20% of these relating to clone scams.
One of the most notable actions the FCA took during this period was the regulator’s Dear CEO letter to 27,000 firms offering Buy Now Pay Later (“BNPL”) products. The Dear CEO letter warned firms offering BNPL products that whilst some agreements are unregulated the financial promotions of all BNPL products must comply with financial promotion rules. The FCA have committed to proactive monitoring during Q4 and if firms fail to comply, have said that they may use criminal and regulatory enforcement powers.
Additionally, on 29th of July 2022, firms offering pre-paid funeral plans came under FCA regulation. From this date all funeral plan providers needed to follow new FCA rules, which include a ban on cold calling and commission paid to intermediaries, and high standards on governance and financial resilience.
The FCA expect authorised firms issuing financial promotions to take responsibility in making sure all communications of financial promotions are clear, fair and not misleading. This also includes firms that are approving financial promotions and have 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.
You can read the FCA’s published Financial Promotions data from 2021-2022 here.