The Financial Conduct Authority (“FCA”) has warned consumer credit lenders and brokers to stop using misleading terms in their advertising.
The FCA have written to over 27,000 consumer credit firms warning them not to use terms such as ‘no credit check loans’, ‘loan guaranteed’, ‘pre-approved’ or ‘no credit checks’ when marketing their products. Those firms which use such adverts should not give consumers the impression that they will automatically be granted a loan if they apply, or that they can get a loan without the lender checking whether they can meet affordability assessments.
The FCA monitor online credit advertising to check that firms are complying with its rules and firms which fall foul of the regulators expectations will see action taken against them. The FCA can ban adverts or require firms to change or withdraw them as well as remove a firm’s permissions to engage in regulated credit activity.
Two consumer credit firms have recently found themselves under scrutiny with the FCA and have had to make changes to their financial promotions, including the removal of phrases like ‘no credit check loans’.
