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Are you being misled by credit advertising?

Are you being misled by credit advertising?

Category: Credit cards

Updated: 24/08/2017
First Published: 16/05/2014

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Have you ever been led into believing an attractive advertisement or an exciting claim only to find out the product you spent your hard-earned cash on doesn't live up to expectations?

It's an annoyance for sure, but it can be even more serious when it comes down to credit products as these can affect your financial security, credit history and more.

This is where the Financial Conduct Authority (FCA) steps in to help. They have investigated over 500 advertisements and promotions across a broad range of consumer credit products and found many instances where they are misleading and don't abide by the rules put in place to protect customers.

In fact one in five adverts from consumer credit firms, for products including payday loans, didn't live up to the FCA's financial promotion expectations including many cases where key information should have been included and was missing or difficult to spot.

In total, 108 promotions were identified as not meeting the rules with examples of poor advertising across all mediums including print, online, instore and direct mail. Most firms were, however, happy to make the changes when the shortcomings were pointed out and so far 75 firms have responded, amending or withdrawing the offending promotions, and the rest are in the process of responding.

Clive Adamson, director of supervision at the FCA, said:

"It is particularly important in this sector that advertisements for financial products enable customers to make informed decisions. We think that more can be done to ensure that advertisements are fair, clear and not misleading.

"Firms have responded well when challenged about ads which have not met the standards. We will continue to work with firms and monitor their performance in this area to ensure the high standards we are looking for are met."

So what is not misleading? Leading people towards an 'apply' button before they've had the chance to review important information is against the rules as is targeting young consumers with promotions for products that should only be available to those over the age of 18.

Claims that a product will repair a credit rating, or that it will clear a customer's debt, when it is just substituting one debt for another is an additional falsity that had to be addressed.

The FCA is continuing to stand up for customers' rights and monitor these promotions, but it is also important for you to remain vigilant and do your best not to be taken in by false advertising. And if you see anything that you feel is unfair or misleading then report it; the FCA also acts on complaints received from the public and via the Advertising Standards Authority.

If you want an unbiased way of searching for products such as credit cards or loans then use our comparison tools to find the best deals for your individual needs.

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Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.