How is the FCA cracking down on misleading car‑finance adverts? 170 ads pulled in June

The Financial Conduct Authority (FCA) removed or amended 170 misleading car‑finance claims adverts in June after launching a joint taskforce with the Advertising Standards Authority (ASA).

Joint taskforce targets claims management companies

The FCA has been collaborating with the ASA to focus on claims management companies (CMCs) that have proliferated false adverts following the introduction of the car‑finance compensation scheme. This partnership is part of a wider drive to protect consumers from misleading financial promotions.

Scope of the FCA’s enforcement since January 2024

Since the start of the year, the FCA reports that 1,200 misleading advertisements have been changed or amended. The June figures represent a significant increase in enforcement activity, highlighting the regulator’s commitment to cleaning up the market.

Typical examples of non‑compliant adverts

One advert examined by the FCA was presented as a consumer post on a social‑media platform, recommending a website for checking finance agreements. The promotion failed to disclose that it was, in fact, a financial promotion for a CMC promoting its own service, breaching transparency rules.

In another case, a firm used the FCA motor‑finance redress scheme to market its services, implying an affiliation with the regulator that did not exist. Additional adverts omitted clear information about free claim options and the FCA’s redress scheme, while promoting claims‑management services without the necessary authorisation.

Voluntary requirements and alerts

The regulator secured voluntary requirements (VREQs) with two firms, which have now agreed to stop or modify the contested marketing activities. In June, the FCA also issued eight alerts against unauthorised firms that were promoting regulated claims‑management activities without the required authorisation.

ASA investigations and broader scrutiny

Concurrently, the ASA launched investigations into a range of motor‑finance claims advertisements placed by law firms. The regulator’s scrutiny is focusing on several key issues, including:

• Clarity around fees associated with finance claims
• The ability for consumers to claim for free via alternative routes
• Potentially exaggerated compensation figures
• Misleading “free checker” tools that could give a false sense of entitlement

Industry response

Alison Walters, director of consumer finance at the FCA, said: “Consumers should be able to trust the information they see about car finance claims. Too often, we are still seeing promotions that obscure key facts, create unnecessary pressure on consumers to sign up, or risk misleading people about their options.”

Miles Lockwood, director of complaints and investigations at the ASA, added: “The work of the taskforce is important; consumers should be treated fairly and be confident that the claims they see in ads for car finance schemes are transparent and truthful. Our investigations will root out problem claims, set clear lines in the sand for advertisers and trigger follow‑up enforcement action where necessary.”

The joint taskforce is continuing to pursue misconduct by CMCs and law firms beyond misleading adverts, and further enforcement action remains possible.