Last week the government responded to the cost-of-living crisis with an emergency mini-budget. With the cap on bankers’ bonuses now removed, the Government appears to be trying to increase London’s status as a centre for finance and we at Cosegic services are interested to see what this may signal for future regulatory policies. However, what is the Regulator doing right now to protect the consumer during this crisis?
It’s current focus seems to be on Buy Now Pay Later (BNPL ). In August The FCA issued a Dear CEO Letter aimed at firms involved with BNPL. It was the latest in a line of communications from the FCA, looking to raise awareness of the harm that can be created by taking on further debts, exempt or not It is not just the consumer’s ability to repay the interest free loan and potential debt spiral that worries the Regulator, but also the impact this will have on any regulated debts and other non-discretionary costs they have.
It also shows that The FCA is worried that consumers are being targeted by both authorised and unauthorised firms, as well as social influencers using social media platforms, to encourage consumers to use this type of credit to smooth out the cost of items they are promoting as opposed to either buying without the use of credit or choosing not to buy.
The FCA reminded firms that promotions should be balanced in their approach to showing risks and benefits, as well as meeting the all-important clear, fair and not misleading test. The FCA are pointing to the new consumer duty and reminding firms of their requirements and duties under the soon to be implemented rules which I am sure will be a recurring theme moving forward on all FCA communications. How are you adapting your marketing to protect consumers from potential harm in the current cost-of-living crisis?
