FCA lightens regulatory load on 0% APR offers

Finance offers where the APR is 0% are to be exempt from regulations requiring a representative example and a representative APR.

FCA lightens regulatory load on 0% APR offers

The Financial Conduct Authority (FCA) said the original purpose of the requirements was to ensure ‘balance’ in advertising, with the representative APR providing a cost indicator to counter-balance emphasis on benefits in the promotion.

In December 2015, the FCA opened a consultation, including the possibility of exempting 0% APR finance offers from these rules. In the consultation, the FCA said the rule served no useful purpose in cases of 0% APR.

In addition, the FCA said exempting such promotions from the requirement for a representative example would reduce costs to firms advertising interest-free credit, and facilitate promotions in media where space was limited.

According to the FCA, the regulator received five pieces of feedback to the consultation, which were described as ‘mostly positive’, and as a result has implemented the changes.