Illegal Finfluencers – FCA Crackdown

The FCA has announced that it is spearheading global action to stop illegal finfluencers.

Commenting on this, Caroline Black consultant at Gherson Solicitors LLP says:

“It is notable that influencers have become a key target for the FCA and internationally in recent months.  Influencers need to be aware that straying into regulated territory is not a way to make easy money – but a quick path to becoming embroiled in criminal legal proceedings.  Advice should be sought prior to producing such content.

Charles Herbert, partner at law firm Spencer West LLP:

“The FCA continues to target illegal finfluencers who put consumer money at risk. Significantly, its cooperation with 16 other international regulators in this effort, including those from Australia, Brazil, Canada, Qatar, Singapore and the UAE, underscores the importance of these measures.

This all goes to show the regulator has, and importantly so, been awake to the trend that millions of consumers are turning to social media for financial advice. Whilst many financial social media content creators are behaving legitimately, unfortunately, some are touting products or services illegally and without FCA authorisation through online videos and posts.

The financial regulator is calling for social media platforms, which it considers are not adhering to their own policies, to do more to stop illegal financial promotions at source. This is particularly important as consumers risk losing access to key protections, such as the Financial Ombudsman Service and Financial Services Compensation Scheme, if they use these services.

The FCA is perhaps optimistically calling on consumers to use the FCA Firm Checker to confirm if a firm is authorised for the services being offered and reduce their chances of falling victim to a scam. It is unclear the extent to which most consumers are aware of, or inclined to use, the FCA’s checking tool but this is an important resource that should have greater visibility. In the meantime, we can expect to see and welcome further action from the FCA in this area.”