Financial Conduct Authority  

'No such thing as a free lunch' as FCA bans mini-bond ads

It reached boiling point at this year's FCA annual public meeting, when the regulator lambasted Google and other internet search engines for their lacking efforts in policing the area. 

In today's announcement the FCA again said these type of online platforms played an "increasingly significant role" in communicating financial promotions to consumers.

The regulator said: "These firms need to do more to stamp out fraud and misleading adverts and bear clear legal liability for the financial promotions they highlight." 

Sarah Coles, personal finance analyst at Hargreaves Lansdown, warned the most dangerous mini-bonds were often specifically designed to be hard to understand and used misleading adverts to persuade investors into taking risks they "do not understand and cannot afford".

Ms Coles said: "But it can’t stop people who are sick of low savings rates hitting the net to search for better returns, so there’s still the risk they could stumble across these bonds in an internet search. 

"Unfortunately, while the ban stops authorised firms mass marketing these bonds, it can’t stop the unauthorised companies who build them.

"It means there’s still a risk you could come across these bonds. It’s one reason why it’s essential you are always confident you know exactly what you’re getting into before you invest."

rachel.mortimer@ft.com 

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