Britain’s Financial Conduct Authority (FCA) has partnered with global regulators to tackle the rising issue of unauthorised financial promotions on social media. This coordinated effort aims to curb the influence of so-called “finfluencers” – individuals who promote financial products or offer advice online without the necessary regulatory approval. The crackdown is part of a global effort to ensure that financial promotions are carried out responsibly and legally.
International Cooperation
In an unprecedented move, the FCA has teamed up with regulatory bodies from Australia, Canada, Hong Kong, Italy, and the United Arab Emirates for a focused week of action. These regulators have joined forces to raise awareness and take action against those who mislead or misinform consumers through unauthorised financial advice and promotions. While the FCA has yet to provide detailed information on the extent of cooperation from other regulators, the collaboration highlights the global concern over the impact of “finfluencers” in the financial space.
Rising Concern Over ‘Finfluencers’
The term “finfluencer” refers to individuals or influencers who use social media platforms like Instagram, YouTube, and TikTok to promote financial products, provide investment advice, or share trading tips. These influencers often have large followings but may not be regulated or qualified to provide such financial guidance. This lack of oversight has raised alarms among financial regulators, as unapproved promotions can mislead consumers and lead to significant financial loss.
The FCA has previously warned influencers about the legal consequences of promoting financial products without proper authorisation, stressing that it could be classified as a criminal offence. This latest crackdown is a continuation of the FCA’s efforts to clamp down on illegal financial promotions and protect consumers from unqualified advice.
The Crackdown Details
As part of the latest action, the FCA has already made significant moves to disrupt illegal financial promotions. These actions include the arrest of three individuals and the issuance of seven cease-and-desist letters. The FCA has also issued 50 warning alerts and is making 650 requests for content removal from social media platforms. Additionally, the watchdog is seeking 50 takedown requests for websites operated by unauthorised financial influencers.
Steve Smart, the joint executive director of enforcement and market oversight at the FCA, reinforced the authority’s message to finfluencers, stating that they must act responsibly and only promote financial products they are authorised to handle. He also warned that failure to do so would result in consequences.
A Focus on Meta
In a separate development, the UK Treasury Committee has called on Meta, the owner of Facebook and Instagram, to provide information on how it handles financial promotions. Lawmakers are reviewing evidence provided by the FCA, which suggests that Meta has been slower than other platforms in removing harmful financial content. This concern over the effectiveness of Meta’s content moderation process adds another layer of scrutiny to the growing issue of illegal financial promotions online.
Looking Ahead
The FCA’s actions are part of a broader global effort to rein in the rise of unauthorised financial content online. Last year, the FCA charged nine individuals over their involvement in a foreign exchange trading scheme promoted through social media, and their trials are scheduled for 2027. The crackdown also sends a strong message to both influencers and social media platforms, urging them to take greater responsibility for the content they host.
The continued regulatory efforts signal a growing commitment to ensuring that financial promotions are safe, legal, and properly regulated, providing consumers with the protection they need when navigating the increasingly complex world of online finance.
