The UK Financial Conduct Authority (FCA) has ordered authorised firms to amend or withdraw 2,211 promotions in Q1 2024.
The retail investments and retail lending sectors had the highest amend/withdraw outcomes, totalling 85% of FCA interventions with authorised firms.
Some of the most common breaches involved claims management companies, credit broker firms, and Contract for Difference (CFDs) providers.
On 8 January 2024, the modification by consent – which delayed the start of the Direct Offer Financial Promotion (DOFP or ‘back end’) rules introduced by Policy Statement 23/6 – ended. The FCA is conducting reviews to test the level of compliance with these rules and will act where it sees breaches, using its supervisory tools and potentially enforcement action, where necessary.
On 7 February 2024, the financial promotions approval gateway came into effect. This means that firms that wish to approve financial promotions on behalf of unauthorised firms outside of their group must apply to the FCA for approver permission. Firms that submitted an application before 7 February can benefit from transitional arrangements allowing them to continue approving promotions while their application is being considered. Reporting requirements also came into effect from 7 February for all firms with approver permission or benefitting from the transitional arrangements.
The FCA proactively reviewed the marketing and promotions of claims management firms for housing disrepair claims. In Q1 2024 following FCA’s engagement with 7 authorised firms, this resulted in 83 amendments/withdrawals and alongside this, FCA is focusing its work regarding unauthorised firms; working to remove unlawful financial promotions.
In the first quarter of 2024, the FCA received 5,722 reports about potential unauthorised business.
The regulator issued 597 alerts about unauthorised firms and individuals. 11% of these related to clone scams, which is where fraudsters use details such as the name and address of authorised firms and individuals, and a ‘firm registration number’ (FRN) to suggest they are genuine. Many of these involved breaches of the financial promotion restriction online. In almost all cases the FCA asked for the websites to be taken down.
