The United Kingdom's Financial Conduct Authority (FCA) has called on social media platforms to enhance their measures against illegal financial promotions. In 2024, the FCA significantly increased its interventions, leading to the withdrawal or amendment of nearly double the number of financial promotions compared to the previous year. The regulator expressed concerns about misleading promotions, particularly those related to cryptocurrency assets, debt solutions, and claims management companies (CMCs). The FCA emphasized the importance of clear, fair, and accurate financial information, especially for vulnerable consumers.

Increased Regulatory Actions Against Misleading Promotions

In response to a surge in misleading financial promotions, the FCA has intensified its efforts to ensure transparency and accuracy in marketing materials. The authority intervened in almost 20,000 cases in 2024, a substantial increase from just over 10,000 instances in 2023. This significant rise highlights the growing challenge posed by deceptive advertising practices, which often target unsuspecting consumers. The FCA is committed to ensuring that financial promotions adhere to strict standards, protecting individuals from potential harm.

Lucy Castledine, director of consumer investment at the FCA, noted that many problematic promotions involved cryptocurrencies, debt solutions, and CMCs. These sectors were particularly concerning due to their potential impact on vulnerable populations. For instance, CMCs accounted for nearly half of the withdrawn promotions, with many focusing on housing disrepair and motor finance claims. The FCA expects firms to take proactive steps to meet regulatory standards and will continue collaborating with other entities, including social media platforms, to prevent illegal promotions from reaching consumers.

Cracking Down on Finfluencers and Strengthening Investor Protection

To address the issue of misleading financial promotions, the FCA has also targeted social media influencers known as "finfluencers." These individuals often promote financial products to their followers, who may be young and potentially vulnerable. In October, the FCA initiated a crackdown on finfluencers, interviewing 20 under caution and issuing alerts against 38 others. The regulator stressed the importance of verifying promoted products to avoid unlawful activities that could jeopardize followers' financial well-being.

Steve Smart, joint executive director of enforcement and market oversight at the FCA, highlighted the trust placed in finfluencers by their followers, especially younger audiences attracted to the lifestyles they showcase. Finfluencers must ensure they do not inadvertently break the law or put their followers' livelihoods and life savings at risk. Additionally, the FCA announced in November its proposal to streamline investor protection rules, aiming to reduce costs for firms while supporting economic growth. This move underscores the FCA's commitment to balancing regulation with fostering a robust financial environment.