SECOND SUPERVISORY NOTICE

To:
Rix Motor Company Limited

FCA reference
number:
656238

DIRECTIONS

1. By a First Supervisory Notice dated 22 November 2019, the Financial Conduct
Authority (the FCA) directed Rix Motor Company Limited (Rix Motors) to
withdraw
from
its
websites
www.rixmotors.co.uk,
www.accept-car-

finance.co.uk and www.carfinance-4u.co.uk and from its Instagram account
@r.x.motor all communications relating to credit broking which do not:

a)
prominently state that Rix Motor Company Limited is a credit broker where
it is acting as such;

b)
give prominent representative examples in accordance with CONC 3.5.5R
where the communication indicates a rate of interest or an amount relating
to the cost of credit whether expressed as a sum of money or a proportion
of a specified amount; or

c)
where using a trading name, all communications which do not give the
legal name of the firm.

2. By the same First Supervisory Notice, the FCA also directed Rix Motors to refrain
from making any communication relating to credit broking which does not:

(a) prominently state that Rix Motor Company Limited is a credit broker where
it is acting as such;

(b) give prominent representative examples in accordance with CONC 3.5.5R
where the communication indicates a rate of interest or an amount relating
to the cost of credit whether expressed as a sum of money or a proportion
of a specified amount; and

(c) where using a trading name, to refrain from making any communications
which do not give the legal name of the firm.

3. The above directions were made for the reasons set out below and pursuant to
section 137S(1) and (2) of the Financial Services and Markets Act 2000 (the
Act).

4. Having considered Rix Motors’ representations made in respect of the First
Supervisory Notice, the FCA has decided for the reasons set out below:

(a)
to revoke the directions at paragraph 1 above; and

(b)
not to revoke or amend the directions at paragraph 2 above.

SUMMARY REASONS FOR GIVING THE DIRECTIONS UNDER THE FIRST
SUPERVISORY NOTICE

5. Rix Motors is authorised by the FCA with permissions which include credit
broking and entering into regulated credit agreements as lender.

6. The FCA considered that Rix Motors’ Instagram account and the websites
referred to above (which include the websites of trading names of Rix Motors)
contained communications which contravened the financial promotion rules
contained in Chapter 3 (Financial promotions and communications with
customers) part of the FCA’s Consumer Credit Sourcebook (known as CONC).

7. The FCA considers giving the above directions to be proportionate in the
circumstances, particularly given the FCA’s financial promotions team has on
two previous occasions identified contraventions by Rix Motors’ of the same
nature as the communications this Notice directs Rix Motors to withdraw.

8. Financial promotions can form a significant part of a consumer’s product
knowledge, and can influence a consumer’s decision making when choosing a
product. A failure to comply with applicable financial promotions rules poses a
risk to consumers being able to make informed decisions.

FACTS AND MATTERS CONCERNING THE COMMUNICATIONS

Instagram posts @r.x.motor

Failure to provide a representative example


9. In October 2019, the FCA identified a number of Instagram posts from this
account which provide weekly and monthly repayment amounts for vehicle
finance which is information relating to the cost of credit.

10. CONC 3.5.3R(1) provides that where a financial promotion indicates a rate of
interest or an amount relating to the cost of credit whether expressed as a sum

of money or a proportion of a specified amount, the financial promotion must
include a representative example given in accordance with CONC 3.5.5R.

11. These communications did not provide a representative example and they
therefore contravened CONC 3.5.3R(1).

Failure to provide a credit broker statement

12. As above, Rix Motors has permission from the FCA to act as a credit broker and
a credit lender. The @r.x.motor Instagram posts relate to its activities as a
credit broker.

13. CONC 3.7.7R(2) provides that a firm which is both a credit broker and a lender
must ensure that any financial promotion that solely promotes its services as a
credit broker states prominently that the financial promotion is promoting the
firm’s services as a credit broker and not its services as a lender.

14. The communications did not provide a prominent statement that these
advertisements related to Rix Motors’ credit broker activities and they therefore
contravened CONC 3.7.7R(2).

Website www.rixmotors.co.uk

Failure to provide a credit broker statement

15. The Rixmotors.co.uk website relates to its activities as a credit broker. As
above, CONC 3.7.7R(2) provides that a firm which is both a credit broker and
a lender must ensure that any financial promotion that solely promotes its
services as a credit broker states prominently that the financial promotion is
promoting the firm’s services as a credit broker and not its services as a lender.

16. The website did not provide a prominent statement that the communication
promotes Rix Motors’ services as a credit broker. The communication therefore
breached CONC 3.7.7R(2).

Failure to provide a prominent representative example

17. The Accept-car-finance.co.uk homepage provided information relating to the
cost of credit available per month. As above, CONC 3.5.3R(1) provides that
where a financial promotion indicates a rate of interest or an amount relating
to the cost of credit whether expressed as a sum of money or a proportion of a
specified amount, the financial promotion must include a representative
example given in accordance with CONC 3.5.5R.


18. CONC 3.5.5R(1) provides the items of information that a representative
example must comprise. CONC 3.5.5R(5)(d) includes that the representative
example must be given no less prominence than any other information relating
to the cost of credit in the financial promotion.


19. The communication provided a representative example which related to this
cost of credit but this only appears further down the webpage. The
representative example could therefore have been easily overlooked. It was

therefore not given the same prominence as the information relating to the cost
of credit and the communication contravened CONC 3.5.5R(5)(d).

Failure to reference a broker statement

20. The Accept-car finance.co.uk website contained a credit broker statement which
appeared at the bottom of the home page.

21. As above, CONC 3.7.7R(2) states that a firm which is both a credit broker and
a lender must ensure that any financial promotion that solely promotes its
services as a credit broker states prominently that the financial promotion is
promoting the firm’s services as a credit broker and not its services as a lender.

22. The inclusion of the credit broker statement at the bottom of the home page
did not in the FCA’s view give sufficient prominence to the statement. This
communication therefore contravened CONC 3.7.7R(2).

Failure to provide a representative example


23. The Carfinance-4u.co.uk website homepage provides information relating to the
cost of credit.

24. As above, CONC 3.5.3R(1) provides that where a financial promotion indicates
a rate of interest or an amount relating to the cost of credit whether expressed
as a sum of money or a proportion of a specified amount, the financial
promotion must include a representative example given in accordance with
CONC 3.5.5R.

25. This communication did not provide a representative example and therefore
contravenes CONC 3.5.3R(1).

Failure to reference a credit broker statement

26. The Carfinance-4u.co.uk website relates to its activities as a credit broker. The
website did not provide a prominent statement that these adverts relate to Rix
Motors’ credit broker activities.

27. The website Carfinance-4u.co.uk is therefore breached CONC 3.7.7R(2) which
requires that, where a firm is a credit broker and a lender, any financial
promotion that solely promotes its services as a credit broker states
prominently that the financial promotion is promoting the firms’ services as a
credit broker and not its services as a lender.

28. In addition, the website did not include the legal name of the firm. CONC 3.7.5R
states that a firm must ensure that a financial promotion or a communication
with a customer specifies the legal name of the firm as it appears in the Financial
Services Register and not merely a trading name. This communication therefore
contravened CONC 3.7.5R.




Previous concerns relating to Financial Promotions Rules

29. The context in which the FCA’s Financial Promotions Team (FPT) sought the
directions given under the First Supervisory Notice is that FPT had substantively
engaged with Rix Motors on two previous occasions in relation its
communications, which FPT considered were contravening financial promotions
rules.

30. In August 2017, FPT identified that the firm had failed to provide representative
examples and prominent credit broker statements on its Accept Car Finance
website and on an Accept Car Finance advertising banner. Rix Motors addressed
these concerns following FPT engagement and the FPT’s engagement ended in
November 2017.

31. In October 2018, FPT identified further contraventions of financial promotions
rules on the Accept Car Finance website. These repeated the August 2017
failure to include representative examples and broker statements where
required. Rix Motors had also used wording that FPT considered misleading to
consumers. FPT identified further contraventions of financial promotions rules
within eBay adverts issued by Rix Motors.

32. FPT issued a letter to the firm in November 2018 requesting that Rix Motors
address these concerns. The FPT letter also provided Rix Motors with
information about the FCA’s power to give directions in relation to
contraventions of financial promotions rules by authorised persons under s137s
FSMA.

33. In addition to this, the letter requested that Rix Motors reviewed all
communications and that FCA rules apply regardless of the media in which its
communications to customers are made. Rix Motors addressed these concerns
following FPT engagement and the case was closed on 29 November 2018.

Reason for revoking direction at paragraph 1

34. The FCA notes that the financial promotions on the above referred three
websites and the above referred Instagram account were amended shortly after
the First Supervisory Notice was issued on 22 November 2019. It is for this
reason that the FCA has decided to revoke the direction cited at paragraph 1
above.

Reason for not revoking or amending the direction at paragraph 2

35. The FCA has also considered whether to amend or revoke the direction cited at
paragraph 2 above. In the context of FPT’s previous concerns relating to the
previously temporary nature of Rix Motors’ compliance with Financial
Promotions Rules, the FCA considers it appropriate not to revoke or amend the
direction at paragraph 2.

PROCEDURE

Decision Maker

36. The decision which gave rise to the obligation to give this Notice was made by
the Regulatory Transactions Committee in accordance with DEPP 4.1.

37. This Notice is given to Rix Motors under section 137S(8),(9) and (10) of the
Act.

38. In accordance with section 137S(11) of the Act, the period for making
representations in relation to the Direction having ended, the FCA intends to
publish such information about the matter as it considers appropriate.

FCA contacts

39. For more information concerning the procedures relating to this Notice or this
matter generally, Rix Motors should contact Claudine Hilton at the FCA (direct
line: 020 7066 0922, email claudine.hilton@fca.org.uk).

Val Smith
Chair of the Regulatory Transactions Committee




ANNEX A - RIX MOTOR COMPANY’S REPRESENTATIONS ON THE
DIRECTION

This Annex sets out a summary of the representations made by Rix Motors in
relation to the “Facts and Matters Concerning the Promotions” section of the Notice
and the FCA’s response to those representations.

Rix Motors’ representations

Rix Motors confirmed they took immediate action and have withdrawn from its
websites
www.rixmotors.co.uk,
www.accept-car-finance.co.uk and

www.carfinance-4u.co.uk and
from
its
Instagram
account
@r.x.motor
all

communications relating to credit broking which are not in accordance with CONC
3.5 5R. Rix Motors stated they have also ensured that when using a trading name,
that they have stated the legal name of the firm, and have made it more prominent
that they are a credit broker.

FCA’s response

The FCA notes that the financial promotions on 3 websites and 1 Instagram page
were amended shortly after the First Supervisory Notice was issued on 22
November 2019.


Rix Motors’ representations

Rix Motors asserted that although it has permissions to lend, it does not actively
promote or advertise this fact as its lending is purely for purchasing
accessories/dealer guarantees whereby the customer would rather pay for the cost
over a short term to keep within their financial budget. Rix Motors stated they do
not lend for the car purchase itself and all short term loans are completely interest
and fee free. Rix Motors has since been advised that due to the amount of money
lent in total at any one time, it can apply to have these permissions removed, which
is something that it is looking into.

FCA’s response

The FCA notes the firm’s use of its lending permissions and that it is considering
removing this permission based on its current activities. Where a firm is both a
credit broker and a lender it must ensure that any financial promotion that solely
promotes its services as a credit broker states prominently that the financial
promotion is promoting the firm’s services as a credit broker and not its services
as a lender as required by CONC 3.7.7R (2).