Financial Services Consumer Panel concerned that short-term lending industry is targeting adverts to the most vulnerable

July 5, 2020

The Financial Services Consumer Panel has published its Discussion Paper based on the findings of two pieces of exploratory research, focusing on the short-term lending and the ‘pensions-to-cash’ sectors, across social media platforms. It raises concerns around the financial promotion of short-term lending products online especially. The Panel fears that the short-term lending industry online is not treating customers fairly by targeting their advertisements to potentially the most vulnerable in society.

High-cost credit

There are 400,000 Google searches per month on high-cost credit keywords and, in January 2020 alone, there were over 10,000 views of YouTube videos featuring high-cost credit. The panel’s main concerns are:

  • How firms target consumers for high-cost credit.
  • Customers drawn to unauthorised clone firms and fake accounts.
  • Opaque and potentially misleading online enquiry and application processes. 

Based on the evidence, the Panel would like to see the FCA:

  • Conduct further research on personalised ad-targeting.
  • Introduce a requirement for the authorised firm or individual to approve the way in which financial promotions target consumers.
  • Use assertive supervision, and have wider conversations with regulated firms and the tech giants to put pressure on them to monitor their social media platforms more effectively, and take immediate action to remove fake accounts and posts.
  • Consider making rules so that risk warnings on social media advertisement for high-cost credit (and other high-risk products) are more prominent. 
  • Prioritise its work to update the FCA Register and Directory and explore how to ensure that consumers know with whom they are dealing.
  • Continue to invest in regtech that can help it identify and take effective action against cloned firms and online frauds and scams.
  • Consider investigating whether online enquiry and application processes comply with FCA Principles for Business.


There are around 25,000 Google searches per month on pensions-to-cash keywords and, in January 2020 alone, over 56,000 views of around 4,000 YouTube videos featuring pensions-to-cash. The Panel is particularly worried about:

  • Unregulated brokers operating in this market.
  • Poor disclosure of regulatory information and risk warnings.
  • Firms targeting the under-55s.

Based on the evidence, the Panel would like to see the FCA:

  • Investigate the digital marketing practices of brokers, where it is within the FCA’s power to do so, to identify risks of consumer harm and take effective action before risks crystallise.
  • Review the effectiveness of disclosure on firms’ websites and their social media content, for example by conducting larger-scale consumer research.
  • Investigate the digital marketing practices of brokers who target the under-55s and the regulated firms who pay them for marketing leads.