What is a financial promotion and why does it matter?

A financial promotion is any communication that invites or induces someone to engage in investment activity or certain consumer credit activities. In practice that means any communication encouraging a customer to consider finance - printed, digital, verbal or online. It does not have to name a lender or a product.

Most businesses assume financial promotions apply only to banks and lenders. The definition is much wider, and many businesses are already issuing them without realising.

What the rules actually cover

The FCA’s definition turns on the effect of the communication, not its format. Encouraging a customer to consider finance as a way to pay for goods or services may be enough to bring the communication within the financial promotions rules. The rules for credit promotions sit in CONC 3 (opens handbook.fca.org.uk in a new tab) of the FCA Handbook.

The distinction matters: a financial promotion is not just selling finance. It is encouraging someone to consider it.

Why financial promotions matter

A financial promotion is often the customer’s first contact with finance. The FCA’s concern is that customers receive accurate information and can understand the costs and risks involved before they commit.

A poor promotion can encourage unsuitable borrowing, obscure important information, exaggerate affordability, or mislead outright. That is why they attract the attention they do.

Where financial promotions appear

Websites

Finance and payment option pages, “Finance Available” banners, homepage graphics, finance calculators, and “Apply for Finance” buttons. If your website encourages customers to consider finance in any way, it likely contains financial promotions.

Social media

The area where businesses most often fall short. Requirements are not relaxed on Facebook, Instagram, LinkedIn, TikTok or X - the FCA set out its expectations in FG24/1 (opens fca.org.uk in a new tab). Every post must be standalone compliant, which covers stories, reels, captions and videos. “Spread the cost”, “drive away today from £299 per month”, “interest-free finance available” and “0% finance this week” can all be financial promotions.

Email marketing

The same rules apply whether you send one email or thousands. Newsletters, promotional emails, finance offers and seasonal campaigns can all encourage customers to take finance.

Printed advertising

Flyers, brochures, magazine and newspaper adverts, and direct mail are all covered.

In-store material

Window stickers, posters, shelf-edge displays, finance leaflets, showroom signage and pull-up banners. If customers see finance promoted in store, it is a financial promotion.

Video

Talking about finance on YouTube, Instagram Reels, Facebook or TikTok is no different from writing about it.

What staff say

The form most businesses forget. “Most people take the finance” or “this is the best finance option” may be a financial promotion depending on the circumstances. Not every conversation is one, which is exactly why staff training matters - the judgement has to be made by the person speaking.

What a financial promotion must be

The standard is that promotions are clear, fair and not misleading.

Clear means customers can easily understand what is offered, how it works and what they are agreeing to. Avoid jargon, confusing wording and hidden conditions.

Fair means benefits are not exaggerated and risks are not hidden. The picture presented should be balanced.

Not misleading means not hiding costs, overstating savings, implying everyone will qualify, or making unrealistic claims. Important information is never buried in small print.

Common mistakes

• Advertising 0% finance without explaining eligibility, availability or terms
• Quoting monthly payments without sufficient context or qualifying information
• Representative APR missing, too small, or difficult to see where it is required
• Treating social media as exempt because the tone is informal
• Adding “Finance Available” to a website without compliance review
• Sales staff making statements they should not, on the assumption that verbal communication is not held to account

What happens if you get it wrong

The FCA can intervene and require promotions to be withdrawn or amended. Enforcement action and financial penalties are available to it, alongside the reputational damage and customer complaints that follow.

Protecting your business

Review communications regularly across your website, email, social media, printed advertising and in-store material. Ensure marketing and compliance work together and that promotions are reviewed before publication. Put staff training in place and audit regularly.

Compliance is not only about the finance agreement. It is about how that agreement is advertised - and reviewing a promotion before publication is considerably easier than correcting it afterwards.