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Keyword advertising must not cause financial promotions to fall foul of compliance standards, warns FCA

Financial services companies have been warned to review their use of online keyword advertising after the City regulator said it can lead to financial promotions being deemed to be misleading.

The Financial Conduct Authority (FCA) said it had seen examples of firms using keyword advertising to promote consumer credit products in a misleading way. Keyword advertising refers to paid advertisements that are triggered to appear in search engine rankings after certain internet search terms are input by search engine users.

The regulator said an example of a non-compliant financial promotion it had identified was where a search for 'government debt help' triggered an "unrelated" sponsored advert to appear for a loan. It said this might have had the effect of "potentially misleading people to believe the firm was offering government assistance when this was not the case".

The example was highlighted by the FCA as it revealed that approximately 15% of the financial promotions for consumer credit products it has reviewed since the beginning of April failed a test of compliance.

In that time the regulator has deemed 227 financial promotions to be non-compliant with rules that require those promotions to be clear, fair and not misleading, it said. In total since 1 April, the FCA said it has reviewed more than 1,500 financial promotions for products such as payday loans, debt management services and credit brokers.

Clive Adamson, director of supervision at the FCA, said: "It is important that all firms ensure financial promotions are fair, clear and not misleading so that customers are able to make informed decisions. We are disappointed to see standards fall short of what we expect, particularly in the consumer credit space, four months from when we took over regulation. We believe that firms in this sector can do more to ensure financial promotions meet the standards we would expect and will continue to monitor performance in this area.”

The FCA said that 80% of the cases it has dealt with since April concerned financial promotions for consumer credit products on "digital media", including websites, emails and in text messages. It said that the firms it has contacted about compliance concerns "have responded positively …and have been quick to make changes to promotions that do not meet the standards".

"The FCA will continue to monitor financial promotions and take action where required to drive up standards," the regulator said. "The FCA acts on complaints received from the public, the Advertising Standards Authority and other organisations."

Last week, the FCA issued new guidance for businesses on how to ensure financial promotions on social media adhere to regulatory standards.

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