How the new FCA Consumer Duty standards affect Consumer Credit radio ads

The FCA’s new Consumer Duty standards came into force on the 31st July. As compliance teams in FCA regulated firms get to grips with how to interpret and implement this guidance, we’ve been asked how these standards will affect radio advertising of Consumer Credit offers.

The new standards are designed to give customers even greater protection by requiring firms to always put the consumer at the heart of their business, taking an outcome-based approach to ensuring that they are treating customers fairly and acting in their best interests. 

The Duty offers four “outcomes”, detailed rules and guidance on expectations for firms’ conduct in areas that represent key elements of the business-customer relationship. This includes the consumer understanding outcome which is about  clear communication and engagement with customers so that they can make effective, timely and properly informed decisions about financial products and services.

It’s perhaps no surprise then that advertisers are considering how best to ensure their advertising messages comply with the Duty and we have received some queries from advertisers about specific areas of concern as a result.

One query in particular we’ve been happy to resolve is the issue of whether or not the offer of “low monthly payments” and “zero deposit” will now require advertisements to include a full Representative Example.

Having reviewed the wording of the Consumer Duty and sought clarification from the FCA, we’ve been advised that the guidance doesn’t affect the specific rules set out in CONC 3.  So whilst ‘low monthly payments’ and ‘zero deposit’ will continue to trigger the requirement under CONC 3.5.7 to give a representative APR there is no new requirement to include a full Representative Example.  Hopefully this will reassure other stations and advertisers with the same concern that, whilst the Consumer Duty supports the specific requirements of CONC , there is no new requirement for ads to include a full Representative Example where this was not previously required.

We welcome the guidance and clarity offered by the Consumer Duty, particularly the advice that firms should avoid unnecessary disclaimers, that key information can be overlooked if more detail is provided than is necessary for a particular communication and that simpler, more concise communications are more likely to be understood.  Furthermore the principle of avoiding unnecessary jargon or technical terms where possible in favour of plain and intelligible language aligns with our own principles of fair and clear communication to ensure that our listeners continue to trust the advertisements they hear on Radiocentre member commercial radio stations.

If you have any other questions on how to ensure your ads for consumer credit include the correct information (and how to potentially reduce disclaimers), check our FCA Confirmed Industry Guidance.

Also have a look at our summary of our research which further demonstrates the importance of keeping additional information in financial advertisements on radio as clear and concise as possible.

Alternatively, you can reach us at clearance@radiocentre.org.