Category: Consultation

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FCA publishes draft guidance on financial promotions on social media

On 17 July 2023, the UK Financial Conduct Authority (the FCA) published a press release and draft guidance dealing with financial promotions on social media. This has been a hot topic for a number of years. The consultation period ends on 11 September 2023. Responses can be sent by email to gc23-2@fca.org.uk.

The key messages from the draft guidance are that:

– The FCA proposes to keep the key principles of Finalised Guidance 15/4, including its expectation that financial promotions should be standalone compliant.

– The consumer duty (which comes into force on 31 July 2023) will “raise our expectations of firms communicating financial promotions on social medium above the requirement of Principle 7 to be ‘clear, fair and not misleading’.“

– The FCA will continue to focus on compliance issues on social media (and, in particular, says firms should consider whether financial promotions for debt counselling would be appropriate given the complexity of such services).

– For unregulated buy-now, pay-later products, the promotion must outline the relevant risks and be balanced (and there’s a proposed example, in Figure 6, of a clear, fair and not misleading promotion).

– The FCA sets out its expectations on prominence standards for social media channels.

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Government publishes consultation on regulation of unregulated Buy-Now Pay-Later

On 21 October 2021, the UK Government published a webpage and a consultation on the proposed regulation of unregulated (or, more accurately, exempt) buy-now pay-later (often called BNPL) agreements.

This consultation follows the recommendations set out in The Woolard Review, and the Government’s announcement on 2 February 2021 that it intended to bring unregulated interest-free BNPL products into regulation.

The consultation asks a number of questions and sets out some of the Government’s thoughts on how the regulatory regime may work for BNPL agreements.

The deadline for responding is 6 January 2022.

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Lending Standards Board consults on its review of the access to banking standard

On 8 June 2021, the Lending Standards Board published a consultation paper on its review of the ‘access to banking standard’ (the Standard).

The Standard aims to ensure that customers are well-informed about branch closures and the options available to them if they do not have a nearby branch. The Standard came into effect in May 2017.

The overarching principle of the Standard is:

“Customers and relevant stakeholders of a bank branch that is closing will be provided with clear, understandable, accessible documentation and information about that specific closure as soon as the bank is able to do so, also what it will mean for them and how they can continue to bank following its closure.”

The LSB wishes to review the Standard’s effectiveness. This will include considering the impact (if any) of Finalised Guidance 20/3: ‘Branch and ATM closures or conversions’ and Finalised Guidance 21/1: ‘Guidance for firms on the fair treatment of vulnerable customers’.

The consultation period ends on 4 August 2021.

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Payment Systems Regulator consults on its proposed five year strategy

On 10 June 2021, the UK Payment Systems Regulator (the PSR) published a consultation paper setting out its proposed five year strategy.

The PSR proposes to focus on four key strategic outcomes:

– All users should have access to payment services that meet their needs in terms of functions, quality, cost and other relevant factors.

– Users’ interest must be adequately protected when using payment systems so that they can use systems and services with confidence.

– Payment systems should be designed and operated to enable effective competition in the provision of payment services.

– Payment systems should be efficient and commercial sustainable.

The consultation period ends on 10 September 2021. The PSR aims to publish its finalised strategy before the end of 2021.

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HM Treasury publishes new amending regulations changing the form and content of default, enforcement and termination notices

On 11 November 2020, HM Treasury laid before Parliament the Consumer Credit (Enforcement, Default and Termination Notices) (Coronavirus) (Amendment) Regulations 2020 and published an explanatory memorandum.

These regulations amend the Consumer Credit (Enforcement, Default and Termination Notices) Regulations 1983, which prescribe the form and content of:

– an enforcement notice under Section 76(1) of the Consumer Credit Act 1974;

– a default notice under Section 87(1) of the Consumer Credit Act 1974; and

– a termination notice under Section 98(1) of the Consumer Credit Act 1974.

These changes make significant changes to the form and content of such notices. The changes come into force on 2 December 2020.

By Regulation 9 of the Consumer Credit (Enforcement, Default and Termination Notices) (Coronavirus) (Amendment) Regulations 2020, there is a transitional period of six months from 2 December 2020 during which time a notice under Sections 76(1), 87(1) or 98(1) of the Consumer Credit Act 1974 will be compliant if it complies with the Consumer Credit (Enforcement, Default and Termination Notices) Regulations 1983 immediately before its amendment on 2 December 2020.

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HM Treasury consults on regulatory framework for the approval of financial promotions

Earlier this week, on 20 July 2020, HM Treasury published a consultation on the regulatory framework for the approval of financial promotions.

HM Treasury says that experience in recent years suggests the regime needs “additional safeguards to ensure that approval by an authorised person is a genuinely effective means of ensuring that consumers are protected from deficient or potentially harmful financial promotions“.

To strengthen the Financial Conduct Authority’s ability to ensure the approval of financial
promotions operates effectively, the Government proposes to establish a regulatory ‘gateway’, which a firm must pass through before it is able to approve the financial promotions of unauthorised firms. Any firm wishing to approve the financial promotions of unauthorised firms would therefore first need to obtain the FCA’s consent.

The deadline for responding is 12pm on 25 October 2020.

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FCA consults on draft updated temporary guidance to motor finance and high cost credit firms dealing with customers needing COVID-19 related payment deferrals

Earlier today, on 3 July 2020, the UK Financial Conduct Authority issued a consultation on draft updated temporary guidance to motor finance and high-cost credit firms dealing with customers needing COVID-19 related payment deferrals.

There’s draft guidance for motor finance, for high-cost short-term credit and for rent-to-own, buy-now pay-later and pawnbroking agreements. There’s also a draft handbook instrument.

My one page summary is (and you can see a bigger version if you click on it):

If you want a pdf copy, please get in touch: russell.kelsall@TLTsolicitors.com.

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FCA consults on draft updated temporary guidance to credit card, overdraft and personal loan consumer credit firms dealing with customers needing COVID-19 related payment holidays

Earlier today, on 19 June 2020, the UK Financial Conduct Authority issued a consultation on draft updated temporary guidance to credit card, overdraft and personal loan consumer credit firms dealing with customers needing COVID-19 related payment holidays.

There’s draft guidance for credit cards (including retail revolving credit), for overdrafts and for personal loans. There’s also a draft handbook instrument.

My one page summary is (and you can see a bigger version if you click on it):

If you want a pdf copy, please get in touch: russell.kelsall@TLTsolicitors.com.