- Summary:
- Financial Conduct Authority blocked over 8,500 misleading online financial promotions in 2022. A 14-fold increase from the previous year.
The Financial Conduct Authority (FCA) in Britain has issued a warning to big tech companies about the need for greater consumer protection. The FCA stated that it blocked over 8,500 misleading online financial promotions in 2022, which is a significant increase from the previous year. These promotions were mostly conducted by unauthorized individuals referred to as ‘fin-fluencers’, who promote investments on social media platforms.
This regulatory news comes after close coordination of FCA UK with several big tech companies to change their advertising policies to only allow authorized promotions. The FCA is also in the process of consulting on the introduction of tougher checks for firms that approve financial promotions to help prevent promotions by unauthorized firms and individuals.
The introduction of the Consumer Duty in July will increase transparency for customers and will require firms to provide more detailed information about financial products and services. Despite resistance from the financial sector, the FCA is determined to implement these measures, as it believes that consumers should be protected from misleading and potentially harmful financial promotions.
Financial Conduct Authority Tightens The Screws On ‘Fin-fluencers’
In addition to stricter checks for promotions, the FCA is also cracking down on ‘fin-fluencers’. These social media influencers are not authorized to advise people on investment options. The Financial Conduct Authority UK has already taken action against several individuals and companies. This includes blocking a director of a regulated firm from using social media to promote financial services.
The FCA’s Executive Director, Markets, Sarah Pritchard, stated that the expectations for financial promotions remain unchanged – they must be fair, clear, and not misleading. However, the FCA has improved its technology, enabling it to quickly identify and address poor-quality or misleading ads. The FCA will continue to put pressure on individuals and companies that use social media to promote illegal investments, which puts people’s hard-earned money at risk.
Given the current financial climate, the FCA is concerned that people struggling with their finances may be more susceptible to scams or adverts promoting high-risk, unregulated products. The regulator continues to use its ScamSmart campaign to educate people about how to avoid investment and pension scams.