The U.K.’s Financial Conduct Authority (FCA) is teaming up with advertising regulators to warn social media influencers about the risks they run when promoting potentially illegal investment schemes.
The FCA said that, along with the Advertising Standards Authority (ACA), it has become increasingly concerned about investor harm resulting from schemes being promoted on social media.
Given their concerns, the regulators will be engaging with so-called finfluencers and their agents to educate them about illegal financial promotions, and to alert them to the kinds of things they should consider before accepting brand deals involving financial products and services.
“We’ve seen more cases of influencers touting products that they shouldn’t be,” said Sarah Pritchard, executive director, markets, with the FCA, in a release. “They are often doing this without knowledge of the rules and without understanding of the harm they could cause their followers.”
“We want to work with influencers so they keep on the right side of the law, as this will also help protect people from being shown scams or investments that are too risky,” she said.
The FCA’s latest annual report on financial promotions showed that its interventions led to 8,582 promotions being amended or withdrawn in 2022 — more than 14 times the previous year’s total.
Social media influencer Sharon Gaffka said, “When you leave a show like Love Island, you are bombarded with opportunities to promote products and work with brands. [I]f like me, you’re new to this kind of work, it can be a little bit overwhelming. This campaign with the FCA and ASA will hopefully make sure other influencers stay on the right side of the law and prevent them from unknowingly introducing their followers to scams or high-risk investments.”