P2P firms among most common culprits of financial promotions breaches
Peer-to-peer lending platforms were involved in some of the most common breaches of the City regulator’s financial promotions rules in the second quarter of this year.
The Financial Conduct Authority (FCA) released its latest data on its enforcement of financial promotion rules, for the period between 1 April and 30 June.
Its interventions resulted in 1,507 promotions being amended or withdrawn by authorised firms.
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Retail investments and retail lending were the sectors with the highest amend/withdraw outcomes, totalling 70 per cent of the FCA’s interventions with authorised firms over the period.
The regulator said some of the most common breaches involved debt advice firms and P2P lending platforms.
Read more: FCA challenged 8,582 financial promotions last year
Additionally, the FCA issued 400 alerts on unauthorised firms and individuals, 11 per cent of which were clone scams.
However, the figures were down on the first quarter of this year, when 2,235 promotions were either amended or withdrawn by authorised firms and a further 611 alerts were raised on unauthorised firms and individuals.
Last year, the FCA finalised its rules on the marketing of high-risk investments to consumers, which includes P2P lending under its definition. The new rules require firms to use clearer and more prominent risk warnings, and to stop offering investor incentives such as ‘refer a friend bonuses’.
The second-quarter financial promotions data comes ahead of the FCA’s new Consumer Duty, which came into force on 31 July. The new Duty sets higher standards of consumer protection for regulated firms.