The Financial Conduct Authority (FCA) in the UK has teamed up with regulators from around the world to combat illegal finfluencers. Nine regulatory bodies—Australia, Hong Kong, Canada, Italy, the UAE, and the UK—are collaborating to safeguard social media users from unsound financial promotions by irresponsible influencers.
What Has FCA Done So Far
In the UK, the FCA has dispatched 50 warning alerts and issued seven cease-and-desist letters in response to misleading financial claims made by influencers. Additionally, three arrests have been made with assistance from local London police forces, and criminal proceedings are underway against several individuals.
According to the FCA, finfluencers must exercise responsible conduct and can only promote authorized financial products. The warning alerts have led to over 650 social media posts being removed and more than 50 websites operated by illegal finfluencers being shut down.
The FCA began issuing warnings against fake advertisers of trading investments on social media in March 2024, with the goal of fostering greater financial responsibility and transparency regarding the risks involved in trading alternative financial assets. Promoting complex and high-risk products poses a significant risk to consumers and necessitates stringent measures for their protection.
Unfortunately, many of these accounts are based outside the UK, complicating the FCA’s ability to take action without coordinated international law enforcement efforts.
Future Actions by the FCA
By partnering with regulators from various global territories, the FCA aims to send a clear message to unscrupulous finfluencers and increase awareness of their harmful effects. Internationally, several other regulatory bodies have taken similar actions, highlighting the magnitude of this issue.
Additionally, social media platforms must assume more responsibility for the content they allow to be shared, especially given its wide reach and influence on a susceptible audience. However, without robust governance, social media giants cannot be compelled to monitor and police influencers to protect vulnerable consumers.
The FCA notes that many victims of financial scams often refrain from taking legal action unless the losses are substantial, leaving few remedies for those who have already been defrauded.
