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

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

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.

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.

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

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]

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]

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]

1. (1)

   6Firms are reminded that the Consumer Protection from Unfair Trading Regulations 2008 (SI 2008/1277), as well as Principle 7 and CONC 3.3.1R, apply to communications and financial promotions in relation to BNPL agreements, including communications with borrowers under existing agreements.

2. (2)

   A communication or financial promotion in relation to a BNPL agreement is likely to be misleading by omission if it:

   1. (a)

      refers to a zero percentage or low interest, introductory or other promotional offer available under a BNPL agreement;

   2. (b)

      does so in a way that is likely to influence a customer’s decision about whether to enter into a BNPL agreement or whether and how to make use of credit available under an existing BNPL agreement; and

   3. (c)

      does not also include in a fair and prominent manner material information about relevant risks.

3. (3)

   A firm should also consider whether other communications or financial promotions in connection with BNPL agreements could be misleading by omission if those communications or financial promotions do not also include in a fair and prominent manner material information about relevant risks.

4. (4)

   Relevant risks relating to BNPL credit include the limitations that apply to any zero percentage or low interest, introductory or other FCA 2019/72 Page 4 of 6 promotional offer, including the circumstances in which interest or charges could become payable and how these would be calculated if those circumstances arose, including the date from which interest or charges would accrue, the rate of that interest or those charges and the amount of principal on which the interest would be charged. The average consumer is likely to need information about these matters to make an informed decision about whether to enter into a BNPL agreement, or whether and how to make use of credit available under an existing BNPL agreement.

5. (5)

   The information that a communication or financial promotion about a BNPL agreement is required to include to avoid a misleading effect, and how that information should be presented, will depend on the context of the communication or financial promotion, including its medium and any other information that the firm has provided to the recipient.

4 5A communication or a financial promotion that refers to sums available by way of an authorised non-business overdraft agreement should make clear that such sums constitute borrowing or credit.