22 August: FCA Tells Firms Not To Use Misleading Ads
The Financial Conduct Authority (FCA), the UK’s financial regulator, has warned firms using misleading advertising to promote Buy Now Pay Later (BNPL) services that they could be committing a criminal offence, writes Candiece Cyrus.
The BNPL market is unregulated at the moment, but the regulator has previously used its powers under the Consumer Rights Act to criticise BNPL firms for holding customers to “potentially unfair and unclear terms”.
The FCA is now reminding firms that promotions for BNPL products, including those online and posted by social media influencers, may breach FCA rules if they do not warn of the risk of taking on debt.
It is proactively monitoring the market to ensure its expectations are met and has said it will use criminal and regulatory enforcement powers if it sees promotions that do not comply. So far this year, FCA action against firms that have breached its rules have led to 4,226 promotions being changed or withdrawn.
BNPL schemes have become an ever more popular form of payment for purchases, from clothing to food. A survey by Barclays in June this year found that over a third of shoppers are finding BNPL schemes more appealing, due to soaring prices.
They can be an attractive payment option for many as they allow customers to pay off what they owe, typically over a set number of weeks or months. These repayments are usually interest-free, provided that…
