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Financial Promotion and TCF

Advertising/financial promotion checklist

To download this checklist in Word format for own-branding follow the link on the right-hand side or below.

General

  • Content has been approved by an authorised individual.
  • Content includes company (or trading) name and an address or contact point eg telephone number at which the full address is available.
  • If the content mentions the FCA as regulator but also promotes areas not regulated by them, this is made clear. 
  • Nothing is left out whereby the exclusion makes the promotion unclear, unfair or misleading – for example, early repayment charges, the fact that variable interest rates can rise etc.
  • Where a product feature has both benefits and associated disadvantages both have equal prominence/font size in the promotion.
  • All statements and comparisons are accurate, have been checked and can be substantiated.
  • Any assumptions on which figures/statements are based are prominently displayed.
  • Marketing straplines/taglines do not over-promise.
  • Benefits are factual and not over-stated.
  • Any definition of any award a firm has won and chosen to display on the promotion is explained, and is recent and relevant.

Targeting

  • The product being promoted in the advertisement/Direct Mail is suitable for the target audience.

Associated products

  • Where a product is sold alongside the mortgage (eg MPPI), the promotion makes it clear that there is no obligation to buy the associated product.
  • Promotions of associated investment products designed to repay an interest only mortgage don’t cherry pick favourable past performance or induce the audience to believe that past performance will be repeated in the future.

Tied products

  • If the mortgage requires the consumer to buy a product or products from a specific firm, this fact is stated prominently in the promotion.

Risk statements

  • One or more of the following required risk statements has been included, for the product(s) being promoted (including TV/Radio ads during or around programming that promote lending and feature ads on interactive TV):
  • Regulated lifetime mortgage contract: 'This is a lifetime mortgage. To understand the features and risks, ask for a personalised illustration.'
  • Paying off credit cards, loans, overdrafts etc: 'Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage.'
  • All other mortgage promotions (including foreign currency): 'Your home may be repossessed if you do not keep up repayments on your mortgage.'
  • Foreign currency mortgage: 'Changes in the exchange rate may increase the sterling equivalent of your debt.'
  • The above sequence has been followed where more than one statement is included.
  • Required warning statements are visually prominent - not cluttered by surrounding text or hard to read/easy to miss due to use of colour/font/type size
  • If any foreign language risk statements are included (optional), they carry equal prominence to the English versions.
  • Font size for warning statements is not so small as to be difficult to read.

APR

  • The APR is included, expressed as follows: ‘The overall cost for comparison is X% APR’, and is positioned immediately after the rate to which it refers.
  • There are no brackets around the APR statement - or other visual effect that diminishes its prominence in relation to the other rates/charges.
  • The APR statement has equal prominence with:
    • all other price information, including rates, charges, fees – and the amount/frequency of fees
    • information promoting availability of credit for customers who may previously have had credit problems, ie text relating to ‘credit history’ ‘credit rating’ ‘CCJs’ employment/housing circumstances etc
  • The APR has been calculated in accordance with FCA rules. 
  • Where an APR included in the promotion varies depending on the customer’s circumstances, the following statement is prominently included: 'The actual rate available will depend upon your circumstances. Ask for a personalised illustration.'
  • If a variable APR has been used it is at or above the APR that you expect at least 66% of customers responding to the promotion will be charged (based on previous similar business in the last year or, for new products, the business plan).
  • The above rules have been applied for all APRs that appear in the promotion or ad if more than one and all APRs carry equal visual prominence.

Multi-rate products

  • If the promotion includes multi-rate products, all relevant rates have been included in sequence one after the other and have equal prominence to the starting rate.
  • Any future variable rate quoted is based on the lender’s current variable rate.
  • Each rate quoted is followed by clear wording showing how long it will last (eg ‘X% until dd/mm/yy’) and the rate to which it will then change (eg ‘The rate then changes to Y%’).

Fees

  • Any fees (cash value or percentage) for arranging or advising on the mortgage are clearly stated if known, or are representative of the typical fee expected for this business type.
  • Where the fee is unknown, wording along these lines has been included: ‘'There will be a fee for mortgage advice. The precise amount will depend on your circumstances but we estimate that it will be £X'.

Language

  • Takes into account the target market’s likely understanding of financial products.
  • Is clear and as jargon-free as possible (including for Terms and Conditions).
  • Jargon terms that are included are explained (eg ASU), or a cross reference to an explanation is provided.

Direct mail/marketing literature/T&C/application forms

While some of the points below relate to lender literature or forms, as part of TCF you need to be satisfied that the material provided to your customers supports the principle – if it doesn’t then it’s important to relate any concerns you have back to the product provider.

  • The marketing message/literature clearly states all of the features and risks of the product.
  • Product Terms and Conditions are expressed in plain English.
  • A contact number is given for customers to raise queries and an appropriate trained resource is on hand to respond.
  • A cooling off period is clearly stated.
  • The right to cancel and related terms are clearly stated.
  • Any repayment penalties are clearly stated.
  • Both the borrower’s and lender’s responsibility regarding the affordability of the loan is made clear.
  • There are clear instructions on what a customer should do if they find themselves in financial difficulties.
  • A separate signature is provided for insurance products
  • Insurance documents: where PPI (Personal Protection Insurance) is offered, is the fact that it’s optional clearly stated?
  • Insurance documents: where PPI is offered, does the proposal document present the information in a balanced rather than ‘persuasive’ way?

This checklist offers a general guide only. Check the detailed rules on financial promotion on the FCA website.

 

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