The National Pawnbrokers Association (NPA) supports the Financial Conduct Authority’s (FCA) approach on using social media to promote financial products. The FCA’s consultation sets out proposed guidelines to help firms understand how they can use social media platforms while ensuring that consumers are presented with information in a fair and balanced way.
The NPA’s response supports the criteria set out by the FCA in principle, while providing a number of recommendations to help the guidelines work effectively in the pawnbroking industry.
The NPA agrees with the FCA’s recommendation that the use of images will help convey any pertinent features or key messages that customers should consider.
It is essential that pawnbrokers convey to potential customers the way in which the pawnbroking industry works and why it is different to unsecured lending, such as pay day loans. It is a short term loan secured against an asset, such as a gold ring, and can be redeemed at any point during the contract with interest payable to the date of redemption. Rates are currently 7% to 10% per month. If a loan is not paid by the end of the contract period, then the item could be sold – but as long as the loan is greater than £75, the surplus after the loan, interest and reasonable costs are deduced is returned to the customer. The NPA proposes that these core messages should be communicated by pawnbroking professions through all active social media platforms.
NPA Chief Executive, Ray Perry, says:
‘Social media is a great way to allow pawnbrokers to reach out to a wider audience and increase consumer awareness. However, communication should be fair and clear and customers should have some understanding of the basic parameters of any financial offer.'
‘The FCA’s guidelines is a big step forward in achieving consistency in this fast expanding media across consumer credit industries including pawnbroking.'
‘We will be encouraging all of our members to effectively use social media platforms, ensuring that all pawnbrokers understand the guidelines set by the FCA.’