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CONC 3.3 The clear fair and not misleading rule and general requirements

CONC 3.3.1 R RP
  1. (1)

    A firm must ensure that a communication or a financial promotion is clear, fair, and not misleading.

    [Note: paragraphs 2.2 of ILG, 3.16 of DMG and 3.1 of CBG]

  2. (1A)

    A firm must ensure that each communication and each financial promotion:3

    1. (a)

      is clearly identifiable as such;3

    2. (b)

      is accurate;3

    3. (c)

      is balanced and, in particular, does not emphasise any potential benefits of a product or service without also giving a fair and prominent indication of any relevant risks;3

    4. (d)

      is sufficient for, and presented in a way that is likely to be understood by, the average member of the group to which it is directed, or by which it is likely to be received; and3

    5. (e)

      does not disguise, omit, diminish or obscure important information, statements or warnings.3

  3. (1B)

    A firm must ensure that, where a communication or financial promotion contains a comparison or contrast, the comparison or contrast is presented in a fair and balanced way and is meaningful.3

  4. (2)

    If, for a particular communication or financial promotion, a firm takes reasonable steps to ensure it complies with (1), (1A) and (1B),3 a contravention does not give rise to a right of action under section 138D of the Act.

General requirements

CONC 3.3.2 R RP

A firm must ensure that a communication or a financial promotion:

  1. (1)

    uses plain and intelligible language;

  2. (2)

    is easily legible (or, in the case of any information given orally, clearly audible);

  3. (3)

    specifies the name of the person making the communication or communicating the financial promotion or the person on whose behalf the financial promotion is made; and

  4. (4)

    in the case of a communication or financial promotion in relation to credit broking, specifies3 the name3 of the lender (where it is known).

    [Note: paragraph 4.8a of CBG]

[Note: regulation 3 of CCAR 2004 and regulation 3 of CCAR 2010]

CONC 3.3.3 R RP
  1. (1)

    A firm must not in a financial promotion or a communication to a customer state or imply3 that credit is available regardless of the customer’s financial circumstances or status.

[Note: paragraphs 3.7o of CBG and 5.2 of ILG]

  1. (2)

    This rule does not apply to a financial promotion or communication relating to a credit agreement under which a person takes an article in pawn and the customer’s total financial liability (including capital, interest and all other charges) is limited under the agreement to the proceeds of sale which would represent the true market value (within the meaning of section 121 of the CCA) of the article or articles pawned by the customer.3

CONC 3.3.4 G RP
  1. (1)

    A firm's trading name, internet address or logo, in particular, could fall within CONC 3.3.3 R.

    [Note: paragraph 5.2 (box) of ILG]

  2. (2)

    A statement or an implication that credit is guaranteed or pre-approved, or is not subject to any credit checks or other assessment of creditworthiness, may contravene CONC 3.3.3R. Firms are reminded of the requirements of CONC 5 (Responsible lending).3

Guidance on clear, fair and not misleading

CONC 3.3.5 G

[deleted]3

CONC 3.3.6 G RP

If a communication or a financial promotion names the FCA, PRA or both as the regulator of a firm and refers to matters not regulated by the FCA, PRA or both, the firm should ensure that the communication or financial promotion makes clear that those matters are not regulated by the FCA, PRA or both.

CONC 3.3.7 G RP

When communicating information, a firm should consider whether omission of any relevant fact will result in information given to the customer being insufficient, unclear, unfair or misleading.

CONC 3.3.8 G RP

A comparison or contrast to which CONC 3.3.1R(1B) applies may be a comparison or contrast with another person, or with another product or service, whether offered by the firm or by another person.3

CONC 3.3.9 G RP

A firm should in a financial promotion or other communication which includes a premium rate telephone number indicate in a prominent way the likely total cost of a premium rate call including the price per minute of a call, the likely duration of calls and the total cost a customer would incur if the customer calls for the full estimated duration.Firms should note the effect of the call charges rule in GEN 7.2

[Note: paragraphs 3.9h of CBG and 3.18x (box) of DMG]

Unfair business practices: financial promotions and communications

CONC 3.3.10 G RP

Examples of practices that are likely to contravene the clear, fair and not misleading rule in CONC 3.3.1 R include:

  1. (1)

    stating or implying that a firm is a lender (where this is not the case);

    [Note: paragraph 3.7e (box) of CBG]

  2. (2)

    misleading a customer as to the availability of a particular credit product;

    [Note: paragraph 3.9p of CBG

  3. (3)

    concealing or misrepresenting the identity or name of the firm;

    [Note: paragraph 3.7g (box) of CBG

  4. (4)

    using false testimonials, endorsements or case studies;

    [Note: paragraph 3.18s of DMG]

  5. (5)

    using false or unsubstantiated claims as to the firm's size or experience or pre-eminence;

    [Note: paragraph 3.18t of DMG]

  6. (6)

    in relation to debt solutions, claiming or implying that a customer will be free of debt in a specified period of time or making statements emphasising a debt-free life or that a debt solution is a stress free or immediate solution;

    [Note: paragraphs 3.18u and 3.18v of DMG]

  7. (7)

    providing online tools, which recommend a particular debt solution as suitable for a customer, such as, budget calculators or advice websites:

    1. (a)

      which do not carry out a sufficiently full assessment of a customer's financial position; or

    2. (b)

      which fail to provide clear warnings to a customer that financial data entered into a tool has to be accurate;

    [Note: paragraph 3.20c of DMG]

  8. (8)

    emphasising any savings available to a customer by proposing to reschedule a customer's debts, without explaining that a lender is not obliged to accept less in settlement of the customer's debts than it is entitled to, nor to freeze interest and charges and that the result may be to increase the total amount payable or the period over which it is to be paid and to impair the customer's credit rating;

    [Note: paragraph 3.18l of DMG]

  9. (9)

    suggesting that a customer'srepayments will be lower under a proposed agreement without also mentioning (where applicable) that the duration of the agreement will be longer or that the total amount payable will be higher.

    [Note: paragraph 5.13 of ILG]

Guidance on misleading introductions

CONC 3.3.11 G RP

Misleading a customer as to the availability of a particular credit1 product is likely to include stating or implying that the firm will introduce the customer to a provider of a standard personal loan based on repayment by instalments or of an overdraft facility on a current account (for example, a bank or building society) or of a credit card, but instead introducing the customer to a provider of high-cost short-term credit.

[Note: paragraph 3.9p (box) of CBG]

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