Economy

City Watchdog bites back against dubious financial ads that mislead

City Watchdog bites back against dubious financial ads that mislead customers

The city’s watchdog is cracking down on companies swinging by dodgy financial advertising.

The Financial Conduct Authority (FCA) will today unveil a range of measures designed to prevent scandals such as the London Capital & Finance (LCF) mini-bond debacle.

Currently, any company authorized by the FCA can approve financial promotions, such as marketing on behalf of other, unregulated companies.

The Financial Conduct Authority will today unveil a range of measures designed to prevent scandals such as the London Capital & Finance mini-bond debacle

But the FCA is concerned that sloppy controls by some firms and collusion between others are exposing customers to illegal, unfair or misleading advertising, especially in areas such as high-risk investments and “buy now, pay later.”

For example, in the case of LCF, the company used its FCA-authorized status to attract clients to its unregulated mini-bond business before going bankrupt in 2019.

Under the FCA’s new rules, which must be passed by parliament in the Financial Services and Markets Bill, authorized companies will now have to undergo additional checks before they can approve marketing.

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Jacky

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