The United Kingdom’s Financial Conduct Authority (FCA) has issued a stringent warning to firms and social media influencers, popularly known as finfluencers, regarding the legality of their online financial promotions. The warning issued is primarily directed at influencers and firms promoting financial services through social media platforms using memes, reels, and gaming streams.
The FCA provided detailed directives, stating that all financial promotions must be fair, clear, and non-misleading to provide consumers with the accurate information required to make informed financial decisions. It further noted that financial influencers are responsible for ensuring their promotional content complies with these guidelines.
The FCA reiterated that promoting a financial product without authorization from an FCA-endorsed entity constitutes a criminal offense, possibly resulting to incarceration for non-compliant influencers. Lucy Castledine, the Director of Consumer Investments at the FCA, stressed the agency’s commitment in protecting consumers from deceptive ads and online scams, stating that they will take action against those promoting financial products illegally.
Over the past year, the FCA has exhibited its dedication to curbing misleading promotions by removing over 10,000 deceptive ads. This move suggests that social media influencers may not be the best channel for promoting complex financial products. As such, the regulatory agency advises firms to carefully consider their choice of advertising channels.