FCA warns BNPL firms about misleading adverts

The regulator said firms might be committing a criminal offence if they don’t have an FCA-authorised company approve their financial promotions. 

Authorised businesses selling unregulated or exempt products must comply with the relevant rules unless an exemption applies. This includes that their BNPL financial promotions must be clear, fair and not misleading. 

The publication of this statement is due to the fact that the FCA is concerned consumers could be misled if BNPL financial adverts on websites and social media, including posts by social media influencers, may breach the regulator’s rules. For example, adverts emphasising the benefits of BNPL products with tough fair and prominent warnings. 

The FCA’s executive director of consumers and competition Sheldon Mills said: “As we face a cost-of-living crisis, consumers are having to make difficult decisions about their finances and how they pay for goods and services.

“Firms need to ensure consumers, particularly those in vulnerable circumstances, are equipped with the right information at the right time, so they can make effective, timely and properly informed decisions. It is vital that adverts are clear, fair and not misleading.” 

It comes after the FCA held a roundtable with BNPL providers to discuss upcoming regulations and called on firms to do more to support borrowers in financial difficulty, including signposting to money guidance and debt advice.