FCA warns consumers about misleading finance claims adverts

As part of the joint regulatory taskforce, the Financial Conduct Authority (FCA) has warned customers to be wary of misleading car finance ‘money tips’ adverts issued by claims management companies (CMCs) and law firms on social media.

The taskforce has identified a growing number of adverts that appear to offer independent advice from an individual but are in fact paid promotions from CMCs and law firms encouraging people to sign up for car finance claims.

Consumers should be aware that some adverts: pose as impartial advice from individuals, without clearly saying they are promoting a business. Misuse of logos, imagery or references linked to well-known companies, media outlets or public bodies or figures to falsely suggest their approval or endorsement have also been highlighted. The FCA recently banned adverts from a CMC which used edited, unauthorised clips of Martin Lewis, Money Saving Expert, to make misleading claims about average car finance compensation.  The adverts also fail to make clear that you can make a claim yourself for free.

Following action by the FCA, one firm has already agreed to take down all its adverts. The FCA, working with its regulatory partners, will take further action to stop consumers being duped into signing up without the right information.

Firms must remove any content that misleads consumers and prevents them from making informed decisions. Firms are expected to take action to ensure any consumers that were misled into signing up are put back into their original position. This may include unwinding contracts for free.

Alison Walters, director of consumer finance at the FCA, said:  “Accessing compensation is free, and people don’t need to use a claims management or law firm to get what they’re owed. If they choose to, it should be a genuine and well-informed choice, not one made because of a misleading advert.”