FCA warns businesses to stop misleading credit adverts

The regulator has written to almost 28,000 consumer credit firms warning them not to use terms such as “no credit check loans”, “loan guaranteed”, “pre-approved” or “no credit checks” when marketing loans. 

Adverts should also not give consumers the impression that they’ll automatically get a loan if they apply, or suggest they can get a loan without the lender checking if they can afford it.

The FCA has said it will continue to monitor online credit advertising to check that firms are complying. If firms fail to comply, the regulator will take action which could include banning adverts or requiring firms to change or withdraw them, or even remove a company’s permissions to engage in regulated credit activity.

Commenting on the news, the FCA’s executive director of consumers and competition Sheldon Mills said: “The rising cost of living means many more consumers may find themselves in difficulty. 

“When people are looking for a loan, it’s vital that they have the full picture about what this might mean and the risks involved - particularly if they are already in a difficult financial situation. 

“There is no excuse for adverts to make borrowing look easier or less risky than it is and they should be seeking to help customers through the cost of living crisis - not exploiting it in their marketing.”