The UK’s Financial Conduct Authority (FCA) has reminded firms that offer buy now, pay later (BNPL) products that they must comply with financial promotion rules.
The FCA says BNPL financial promotions must be “clear, fair and not misleading”, adding unauthorised firms might be committing a criminal offence if they don’t have an FCA-authorised firm approve their financial promotions.
The FCA is “proactively monitoring the market to ensure expectations are met” and states it will use criminal and regulatory enforcement powers if it sees promotions that do not comply. The regulator has already taken action to change or withdraw 4,226 promotions.
In an online world of social media and influencers, the FCA says adverts emphasising the benefits of BNPL products without detailing the risks of taking on debt, missing payments and the impact on people’s credit must be addressed.
Although the FCA does not yet regulate BNPL products, it has held talks with BNPL providers to discuss incoming regulation and earlier this year worked with them to amend “potentially unfair and unclear terms” in BNPL contracts using Consumer Rights Act powers.
The FCA’s executive director of consumers and competition, Sheldon Mills, says the ongoing cost of living crisis means consumers are “having to make difficult decisions”.
“Firms need to ensure consumers, particularly those in vulnerable circumstances, are equipped with the right information at the right time, so they can make effective, timely and properly informed decisions,” Mills says.
The FCA appointed six new directors last month and has hired nearly 500 staff this year as the body expands its remit and embarks on an “ambitious” strategy set out in April.
Image and article originally from www.fintechfutures.com. Read the original article here.