Google to update advertisement rules for debt service providers

These businesses will have to have FCA authorisation for debt adjusting and debt counselling starting from 6 December 2022. Insolvency practitioners will no longer be allowed to advertise these services. 

Additionally, advertisers must successfully complete the updated verification process by the time enforcement begins on 16 January next year. The policy update also allows advertisers included on the FCA Financial Services Register as “exempt professional firms” or recognised investment exchanges to be verified as UK FCA-authorised advertisers. 

In response, charity StepChange has welcomed the announcement, however said the policy was still “widely circumvented by unscrupulous firms”, leading to further action by the Advertising Standards Authority based on input from the debt advice sector. 

Despite this work - as well as those of the FCA working with the Insolvency Practitioners Association - misleading advertising has remained prevalent across search engines and social media sites. 

StepChange’s chief executive Phil Andrew said: “The fact that these misleading advertising issues have persisted for so long, despite so much collective action to attempt to address them, is a terrible indictment of the fee incentives that can provide ripe conditions for the mis-selling of debt solutions to financially vulnerable people.

“While it is to the credit of Google, as well as the Advertising Standards Association, that they keep trying to improve the framework under which such advertising can occur, I am afraid that these efforts - welcome though they are - are addressing the symptom rather than the cause of problems.

“It is the operation of the IVA market that is the underlying cause of the difficulty. As we have long highlighted, the failure rate of IVAs in the wider market is around double the rate of those that StepChange arranges. We think that over-selling and poor management of IVAs is a real problem, and one that urgently needs addressing through regulators.

“Stamping out misleading advertising is a good step, but until anyone getting an IVA is required to go through a proper, FCA-regulated debt advice process first to ensure that this is genuinely the appropriate solution for their needs, the problems are likely to continue.”