The UK’s financial regulator is targeting social media influencers who promote financial products online as part of a broader effort to prevent the public from being deceived.
The Financial Conduct Authority (FCA) says it forced businesses to change or cancel 8,582 promotions in 2022, up 14 times from 2021.
He said he was targeting so-called “finfluencers” and social media in the fight against financial advertising.
He warned that social media influencers – with significant social media followings – who are not authorized to offer online financial advice to the public are cleaning up their actions. She says she has taken action against several of them over the past year.
The FCA said big tech companies and social media platforms “need to do more” to ensure people don’t lose their money to fraud, adding that it “remains concerned about compliance levels.”
The regulator said it is working with several companies to change advertising rules that only allow financial promotions approved by companies authorized by the FCA.
The FCA said it was taking action against a director of a regulated company who was found to have used his personal social media profile to spread recommendations about unauthorized dealers and other financial products.
He said he did not allow them to use their personal social media to promote financial services and asked the company to stop all financial services promotions.
Sara Pritchard, director of market for the FCA, said the watchdog is increasingly concerned that consumers struggling with a cost-of-living crisis are vulnerable to scams or ads that showcase high-risk, unregulated products.
“Our expectations remain the same. Financial advertising must be honest, clear and not misleading. What has changed is the FCA approach. By using better technology, we can find low-quality or misleading ads faster. And where we find them, we step in to get companies to improve or remove them entirely.
“This year, we will continue to put pressure on people who use social media to illegally encourage investment, putting people’s hard-earned money at risk.”
The regulator has previously raised concerns that BNPL (Buy-Now-Pay-Later) financial stocks are a risk area and has seen financial ads on websites and social media, including social media influencer posts promoting benefits of BNPL Advertise products. do not warn you of the risks of default, the consequences of missed payments, or any impact on creditworthiness.
The Competition and Markets Authority (CMA) said it should be able to penalize influencers who fail to properly announce ads in their social media posts. George Lusty, director of the CMA, said legislators’ regulators need more power to take swift and strong action against such violations.
The Advertising Standards Authority (ASA) publicly warned some stars such as the former Dear Islanders Belle Hassan, Jess and Eva Gale and Anna Vakili for failing to properly disclose ads on their Instagram accounts despite repeated warnings.
The FCA is currently discussing stricter controls for businesses wishing to approve financial stocks ahead of July’s introduction of a consumption tax that will require businesses to demonstrate that they provide adequate and accurate information to help consumers make informed financial decisions.
Source: I News
I am Moises Cosgrove and I work for a news website as an author. I specialize in the market section, writing stories about the latest developments in the world of finance and economics. My articles are read by people from all walks of life, from investors to analysts, to everyday citizens looking for insight into how news will affect their finances.