We have the legal power to ban a financial promotion or advert that is unclear, unfair or misleading. This page sets out the action we can take using this power, as well as the steps we usually take in deciding whether to act.
What we can do
If a financial promotion or advert is misleading, we have the legal power under s137S of the Financial Services and Markets Act 2000 to:
- get it withdrawn, or
- prevent it from being used in the first place
This power acts against the promotion or advert, not the firm itself. (It works differently from other powers we have when firms generally don't comply with our rules, or if their overall systems or approach are poor.)
In deciding whether to act, we consider how a financial promotion or advert could lead to people suffering harm − either:
- directly (e.g. taking out a loan for which the real interest you pay is higher than what is advertised), or
- indirectly (e.g. you take out home insurance that was advertised as providing cover against theft, you then get burgled and end up spending money because theft was not actually covered)
How we decide whether a promotion should be banned
In considering whether to use our powers under s137S FSMA, we will:
- assess the extent to which the financial promotion is unclear, unfair and/or misleading
- assess which types of consumers the financial promotion is targeted towards
- usually inform the firm of our concerns and give them an opportunity to respond to those concerns (it may on occasion be necessary to use our powers without informing the firm of our concerns beforehand)
If we are not satisfied with the response from the firm, we will consider whether it would be appropriate to ban the advert.
When we decide to use these powers we will issue a notice of direction to the relevant firm explaining what action it must take (which will normally be to withdraw the advert from circulation with immediate effect).
If a firm doesn’t agree with our decision, it can make representations to us and ultimately refer our decision to the Upper Tribunal.
Publishing our decisions
We have the power to publish such information about a direction as we consider appropriate. This may mean that we publish the action we take under s137S on our website with:
- a copy of the promotion or advert
- the reasons behind our decision
We may also put out a press release.
We may not publish information about the direction if we think this would be:
- unfair to the firm in question, or
- may harm the interests of consumers
On request, we will review published information and decide if it should be taken down.