The Financial Conduct Authority (FCA) has launched a crackdown on illegal financial influencers, or ‘finfluencers,’ as part of its efforts to protect consumers from unlawful promotions.
As of today, the FCA is interviewing twenty finfluencers under caution, investigating whether they have promoted financial services products without proper authorisation. Additionally, 38 alerts have been issued against social media accounts suspected of offering unlawful financial promotions.
With a growing number of young people falling victim to financial scams, the FCA is concerned about the role finfluencers play in misleading consumers. Research shows that nearly two-thirds (62%) of 18 to 29-year-olds follow social media influencers, and of those, 74% trust their advice. Alarmingly, 9 in 10 young followers have changed their financial behaviour based on what they see on social media, which could put their financial wellbeing at risk.
Steve Smart, Joint Executive Director of Enforcement and Market Oversight at the FCA, commented:
“Finfluencers are trusted by the people who follow them, often young and potentially vulnerable individuals attracted to the lifestyle they portray. Finfluencers need to ensure that the products they promote comply with the law, as failing to do so could jeopardise the livelihoods and life savings of their followers.”
If you are seeking financial advice, always ensure your adviser is authorised and regulated by the FCA.
“It is illegal for individuals or companies to promote financial products without FCA authorisation. We take action to protect consumers from unauthorised promotions that put them at risk of financial harm.”
For more information, visit the official FCA website: https://www.fca.org.uk