This page gives a summary of data generated between 1 July 2023 and 30 September 2023 from our actions against firms breaching financial promotion rules, and referrals and investigations into unregulated activity.
This data provides an overview of how we are working to improve standards across the market so that consumers are provided with clear and fair financial promotions which are not misleading.
What’s included in the data
- Key messages
- Authorised firms
- number of financial promotions reviewed during this period
- number of closed cases where promotions have been amended and withdrawn, including split across sectors, excluding cases which are still ongoing
- Unauthorised firms
- number of unauthorised reports received, and alerts issued
- Examples of our work on financial promotions during 2023 Q3:
- reducing and preventing serious harm
- setting and testing higher standards
- promoting competition and positive change
- Information on how to report a misleading financial advert or potential scam
Key messages
- Our interventions in 2023 Q3 resulted in 5,310 promotions being amended or withdrawn by authorised firms.
- We issued 488 alerts on unauthorised firms and individuals, 11% of these were clone scams.
- On 8 October 2023, our financial promotion rules for cryptoassets[1] went live. These rules require financial promotions to be clear, fair, and not misleading, to display clear risk warnings, to disclose the firm’s regulated status and cease offering any form of incentive to invest. Below, we have set out some of our findings before these rules went live.
- We proactively reviewed the marketing and promotions of Enterprise Investment Scheme (EIS) providers which resulted in us writing to 18 firms and 55 promotions being amended or withdrawn. Common concerns included non-compliance of the high-risk warning or the risk summary.
Authorised firms
Number of promotions reviewed
In 2023 Q3 we reviewed 1,211 financial promotions from multiple sources:
75% from our proactive monitoring
11% from consumers
6% from UK Regulators
4% from different areas of the FCA
4% from firms
Following our intervention, in Q3 we had 5,310 promotions amended/withdrawn.
Table 1: Number of cases with interventions and amend/withdraw outcomes
|
2023 Q3 |
|---|
|
0 s137S (the Banning Power) directing a firm to withdraw financial promotions |
|
1 Own Initiative Action for Imposition of Requirements (OIREQ) was approved, restricting the firm’s ability to communicate or approve financial promotions |
|
1 Voluntary Application for Imposition of Requirements (VREQ) was accepted, restricting the firm’s ability to communicate or approve financial promotions |
|
0 Undertaking and Attestation |
|
5,310 promotions were amended or withdrawn following our intervention with 56 authorised firms |
Figure 1 shows the split across sectors.
Chart
Data table
Figures rounded to the nearest percentage.
The retail investments and retail lending sectors had the highest amend/withdraw outcomes, totalling 80% of our interventions with authorised firms.
Some of the most common breaches involved debt advice firms, credit broker firms and Enterprise Investment Scheme (EIS) providers where we undertook a proactive review.
Unauthorised firms
Number of reports received
In 2023 Q3, we received 5,346 reports about potential unauthorised business.
We issued 488 alerts[2] about unauthorised firms and individuals. 11% of these related to clone scams, which is where fraudsters use details such as the name and address of authorised firms and individuals, and a 'firm registration number' (FRN) to suggest they are genuine. Many of these involved breaches of the financial promotion restriction online. In almost all cases we asked for the websites to be taken down.
Examples of our interventions - authorised and unauthorised firms
Reducing and preventing serious harm
|
ISA Manager conducting inadequate due diligence on investments |
|
|---|---|
| Issue |
We were concerned that consumers were being presented materials about investment opportunities where there was significant risk that those materials were inaccurate and/or were potentially misleading. A firm acting as an ISA Manager and providing related services to companies issuing these investment opportunities was unable to demonstrate it understood what they were distributing. The firm had inadequate systems and controls and resources to ensure these investments were distributed appropriately and in the best interest of its clients. |
| Action taken |
Due to the breaches and risks to consumers, we used our Own Initiative for Imposition of Requirements (OIREQ) power to stop the firm undertaking regulated activities for any new investments or new funds into existing investments. |
|
Debt advice firm with unclear and misleading financial promotions |
|
|---|---|
|
Issue |
A debt advice firm was not making it clear in its promotions that consumers can access free debt counselling, free debt adjusting, and free access to providers of credit information services. The firm did not include reference to a not-for-profit debt advice body. In addition to this, it was promoting potentially unachievable debt write-off percentages and implying a consumer could become ‘debt free’ within a certain period. It was also possibly misleading consumers into believing they could become ‘debt free’ without incurring any costs. |
|
Action |
Given the breaches and the potential vulnerability of consumers searching for debt advice, our intervention led to us inviting the firm to apply for the imposition of voluntary requirements (VREQ). The firm amended its website and all other media platforms to ensure it was complying with the relevant Handbook rules. |
|
Contracts For Difference (CFD) firm |
|
|---|---|
|
Issue |
A CFD firm was using promotional language in relation to the status of professional clients and so could be seen as incentivising retail clients to request professional client status. The firm’s social media promotions included promotions that were not for UK consumers which the firm did not make clear. Also, its risk and past performance warnings both lacked prominence. It was using its regulatory status in a promotional way, and it was promoting zero commission, and was not clear about potential fees. |
|
Action |
Following our intervention, the firm amended its financial promotions, including separating out its shared social media platforms making it clearer which promotions were meant for UK consumers. |
|
Credit builder firm not being completely clear about their services |
|
|---|---|
|
Issue |
A lending firm who offered credit builder services failed to make it clear that by using its services there is no guarantee a consumer can improve their credit score. Furthermore, the risk regarding missed or late payments lacked prominence and they were potentially misleading consumers by using out of date data to promote their services. |
|
Action |
Following our intervention, the firm amended its website and social media promotions and reviewed its systems and controls, policies and procedures for its financial promotion activity. |
|
Claims Management firm not making it clear a consumer can claim for free and not meeting our fee disclosure requirements |
|
|---|---|
|
Issue |
A claims management firm was not disclosing on its website and social media promotions, that a consumer is not required to use its services to pursue a claim. The promotions also failed to advise that it is possible for a consumer to present the claim themselves for free, either to the person against whom they wish to complain or to the relevant statutory ombudsman or the statutory compensation scheme. In addition, the firm also used the term, ‘no win, no fee’ on its promotions without providing further details on its applicable fees. |
|
Action |
Following our intervention, the firm withdrew non-compliant social media promotions and amended several promotions across multiple media platforms. |
Setting and testing higher standards
Testing cryptoasset firms’ implementation of PS23/6 rules
On 8 July 2023 we published PS 23/6 - Financial promotions rules for cryptoassets[1] which outlined the requirements for firms promoting cryptoassets to retail clients. The rules went live on 8 October.
To support firms in implementing the requirements we published the good and poor practice[3] from our review of the preparedness of FCA registered cryptoasset firms. We also offered firms the opportunity to request a ‘modification by consent’ to delay the implementation of some of our ‘back-end’ rules until 8 January 2024. We remind firms that we will take robust action with firms that do not comply with our requirements.
Testing firms’ implementation of PS22/10 rules
As outlined in our Q2 publication, we have now completed our review into how firms have implemented our new rules[4] for high-risk investments including their approach to appropriateness tests and client categorisation.
We have now issued individual feedback to all of the firms that took part in our review and published a wider communication outlining our general findings and examples of good and poor practice[5].
Promoting competition and positive change
Proactive review of the marketing and promotions of Enterprise Investment Scheme (EIS) providers
Strengthening our financial promotion rules for high-risk investments and firms approving financial promotions took effect from 1 December 2022 (regarding risk warnings) and 1 February 2023 (regarding all other rules). Further to this we conducted an extensive review of EIS providers. We reviewed 46 EIS product providers’ websites to check compliance with the new high-risk warnings. 18 firms are in the process of being written to regarding non-compliance with the use of the high-risk warnings or the risk summary. This proactive work resulted in 55 promotions being amended or withdrawn. We take matters of non-compliance with our rules seriously, and will consider what further appropriate action to take, which can include using our intervention powers, where appropriate.
How to report a misleading financial advert or potential scam
Report a financial advert or promotion[6] that you think is misleading, unfair or unclear.
Report a scam[7], authorised firm or individual to us.
Our casework with will usually involve confidential information for the purposes of section 348 of the Financial Services and Markets Act 2000. We are therefore unlikely to be able to provide further information about particular cases. Find out more about the information we can share[8].
Disclaimer
- The figures reported within this data are accurate at the time of publication. However, they can be subject to change depending on any ongoing work with a Firm.
- The amend and/or withdraw outcome figure is based on cases closed during this period and will be determined by the number of promotions across various platforms.
Copyright
The data on this page is available under the terms of the Open Government Licence[9].