Right now, a company subject to Financial Conduct Authority (FCA) regulation has the authority to approve marketing materials without that authority’s express approval.
Following a surge in deceptive internet marketing, Britain’s banking watchdog suggested stiffer regulations for allowing financial promotions on Tuesday.
Marketing information can now be allowed by a business licensed by the Financial Conduct Authority (FCA) without its direct approval.
However, under the new regulations, which are part of a proposed financial services and markets bill currently before parliament, businesses accepting the promotions will have to demonstrate that they have the necessary experience.
Consumers are taking less time between viewing an offer and completing a purchase, according to Sarah Pritchard, FCA executive director for markets, who also noted that social media and internet advertising.
“It is, therefore, essential that they are equipped with the right information at the right time so that they can make good financial decisions. This is especially important as we face the rising cost of living,” Pritchard said.
In order to help the FCA crack down on shady advertisements, companies will also be required to submit regular reports to the agency on the financial promotions they have approved.
The FCA said, “Firms who give their approval to marketing literature published by non-regulated companies will face tougher checks.”
“The proposed reforms will ensure the FCA can act quickly to put a stop to harmful financial promotions communicated by unauthorized firms, including in areas such as high-risk investments and Buy Now Pay Later,” the watchdog said.
Source – ET