As part of the Government’s post-Brexit plans to improve the UK’s financial regulatory regime, in February this year the Financial Conduct Authority (FCA) published a new reform of the financial promotion regime. This is also aimed at addressing the need for more robust regulation of the increased number of products and services which have been deemed risky.
According to the new regulation, businesses which offer financial products of any kind should have their financial promotions approved by an authorised approval company following FCA guidelines or need to be authorised themselves. ‘Financial promotions’ includes leaflets, websites, digital advertising and so on.
What does this mean for Medenta Dental Practices?
This new reform affects Medenta customers in two ways. If a practice is authorised by the FCA to do so, they may produce their own financial promotions, however they may not approve external company’s promotions.
If a practice is not authorised by the FCA, then they may not advertise finance products without approval from a “gateway” company. They will also need evidence of this approval.
A gateway company is one that has applied and been granted authorisation by the FCA to approve financial promotions on behalf of a third party.
Fortunately, as Medenta is authorised by the FCA, our practices can still distribute our advertising materials.
What is a Financial Promotion?
The FCA defines a Financial Promotion as ‘an invitation or inducement that is communicated in the course of business’. As already mentioned, financial promotions include leaflets, brochures, social media posts or ads, any marketing emails and entries on your website or posters. You can find out more about them in this article from the FCA.
General Requirements for Financial promotions
Financial promotions need to conform to the following guidelines.
They must be fair and not misleading.
This means there are no hidden charges, and any potential risks are stated clearly and prominently. No hiding things in tiny print.
The best way to ensure your promotions comply with this is to stick to the facts and terms of the loan, as the promotion needs to be accurate and clearly identifiable as a loan/finance product.
The financial promotion must not emphasise any potential benefits of a service without giving a fair indication of the risks. If there are any potential risks with the product then that should be stated clearly in the promotion, as should any warnings. For example, if there are any fee penalties for late payments this should be clear and easily seen.
The promotion is clear and easy to understand. The information in the promotion should be easily understood by the type of person likely to be able to take advantage of it. The promotion should avoid jargon and use language that is easy to understand.
The promotion should state the name of the person making the communication/selling the product. As a Medenta practice, this would include the practice’s contact details, as well as those of Medenta and V12 Retail Finance being shown as part of a disclosure statement on every promotion.
Promotions must not state or imply that credit is available regardless of a customer’s financial status. This means a promotion cannot imply that an applicant is guaranteed to be granted a loan/credit without a credit check or without the need to comply with other conditions.
The FCA Guidance on Financial Promotions has more information.
These regulations should be taken seriously as breaching them is a criminal offence and can have severe consequences. Punishment includes an unlimited fine or up to two years in prison. A Lot of this information can be difficult to digest, so here at Medenta we’ve created a short explainer video with our Head of Medenta, Richard Scarborough.
If you’d like more information on Medenta eligibility criteria please contact the team on Tel:01691 684175 or Email:info@www.medenta.com