The rules are simple – you must be “clear, fair and not misleading” if you promote finance as part of your services to customers.
As a result of our work with car dealerships, credit brokers and unsecured lenders within the motor sector, we frequently come across dealerships that have live websites and / or a range of social media posts promoting finance.
Here are some tips to consider when you’re working on building your website and / or planning your social media strategy for the promotion of finance:
- There’s nothing clever about producing a financial promotion, just the age-old rule of ensuring that it’s clear, fair and not misleading. Check that what – and how you promote finance to your customers is based on information you’d be comfortable responding to if you were the customer.
- Each financial promotion is unique. Although the rules are static, subjectivity is in abundance, for example in respect of ‘prominent’ key information. It’s not just about what you say but where and how information is placed within the promotion itself that’s important.
- Ensure that the individuals responsible for the content of your financial promotions are fully trained in respect of the rules and that your firm follows a compliant review, approval, sign off and monitoring process for all of the financial promotions it produces.
- Due your due diligence before your website content is designed by a third party media firm. Make sure that the firm has a good understanding of the financial promotions rules. We spend a significant amount of time providing feedback to firms that have had a website built, only to find that the content is not compliant. Hence, a re-work of content and additional cost to the firm.
- ‘Vulnerable Customers’ is a relatively new term used within the Financial Services sector. The Financial Conduct Authority has made it clear that vulnerable individuals must be taken into consideration. Always be mindful of your target audience and whether the message you send to them via a financial promotion is appropriate.
So, what’s new in financial promotions? The surge of social media usage for marketing purposes has been a challenge for firms. This is a smart way for firms to promote their services, but it has to be done right. The Financial Conduct Authority has issued specific guidance as a result of the confusion in this area. And it’s not easy figure it out. If you’re not confident, then stay away, or obtain some proper training on how to promote finance on social media in a compliant manner.
There are, of course, other regulatory bodies to consider as well as the Financial Conduct Authority. For example the Information Commissioner and the Advertising Standards Authority. Make sure that you refresh your knowledge of these Regulators and their requirements.
The main challenge that firms appear to have is that they ‘don’t know what they don’t know’. This means that they act with good intentions, but without the knowledge and experience to be able to make sound judgments.
Our advice is stick to what you know. Don’t try anything exotic unless you have appropriate understanding of the rules around it. This will reduce your firm’s risk of running a non-compliant financial promotion that could negate any commercial gain your firm might seek to make.
To get your advertising right, you need to:
- Know and follow the rules for the promotion of credit broking. These rules can be found within CONC 3.
- Follow your own understanding of how to apply the rules. Don’t copy another firm’s website or social media post!
If you’re in any doubt and you want to have a chat about your website or social media posts and how to promote finance, give us a call on 01376 514 166, email us at email@example.com or visit our website http://www.chameleoncompliance.co.uk.