Here are a few best practice pointers for your online finance advertising:

What is a finance promotion? 

A financial promotion is a communication that is an invitation or an inducement to engage in investment activity. 

In other words, there is an element of persuasion. An inducement is intended to lead, ultimately, to an agreement to engage in investment activity.

Where do the rules for finance promotions come from?

• Consumer Credit Act governs finance promotions.

• Consumer Credit Directive is the list of rules.

• FCA took over governance from the OFT 01/04/14.

• FCA produced the Concs which include the CCD but added the principles that also should be followed.

Representative Example

What is a representative example?

A representative example is a term used in UK financial advertising regulations that aim to show consumers the typical costs associated with a product being advertised.

What triggers a representative example

Under regulation 4(1), where the advertisement includes an interest rate or any amount relating to the cost of the credit, then a representative example of the credit on offer must also be included in the advertisement.

What Codeweavers suggest to include in your Representative Example

• The Words "Representative Example"
• The Representative APR expressed in the correct format i.e. "Representative x% APR"
• The Fixed Rate of Interest. We also suggest the termshould be present here
• The Cash Price of Vehicle
• Any Deposit Amount
• The Total Amount of Credit
• The Term of Agreement
• The Amount of Each Repayment
• Details of Any Other Fees or Charges
• The Total Amount Payable

6.8 The representative example must comprise the information listed in regulation 5(1) – the “standard information” – and must be accompanied by the words “representative example”. It must be representative of agreements to which the representative APR applies and which are expected to result from the advertisement.

The Representative Example should be more prominent than the other finance quotes on the page.

This could be through the position on the page, colour, size or font.

6.12 The representative example must be more prominent than any other cost information and any APR trigger. Other examples may also be included, but must be less prominent than the overall representative example. The same applies to any other cost information such as the TCC per £100. The prominence rule does not however apply to non-cost information.

The Representative Example information must be all together and all information should be the same size.

6.14 Under regulation 5(6), the standard information must be clear and concise and presented together. The objective is to ensure that the borrower views the standard information as a whole. This means that the relevant information should appear in the same place – for example in a box – rather than individual pieces of the standard information being scattered around the advertisement so that they are unlikely to be seen together. 

The representative example must be representative of what 51% of customers responding to an advert would expect to be offered.

2.2 The representative APR must reflect at least 51% of business expected to result from the advertisement.

 

The standard information must be representative of agreements to which the representative APR applies.

 

One representative example should be displayed on the page of your website that displays a finance promotion.

Your Listing Page displays multiple vehicles on one advert, therefore one representative example covering all vehicles should be used.

Your Details Page displays a single vehicle advert therefore one representative example covering that vehicle is required.

 

6.11 If there is more than one product which is representative of the Relevant Agreements, either may be shown as the representative example as long as in doing so this does not lead to a misleading example, contrary to the CPRs.

We suggest that the Representative Example is best placed in a box at the top or side of your websites listing page ( as seen above).

6.15 The regulation requires that each item of standard information should be given equal prominence. This means for example that it is not permissible to show the APR with greater prominence. In addition, the standard information must be more prominent than any other information in the advertisement relating to the cost of the credit and any APR trigger.

 

This is not limited to rates and amounts triggering the representative example, but would include any other cost information – for example, a reference to fees/charges being payable (or not payable) or being lower than for other products. 

Contact Codeweavers to find out more.