The FCA has unveiled fresh plans to combat illegal and non-compliant financial promotions on social media.

According to the regulator, the proposals will “modernise” the information that firms should use when promoting financial products or services online.

The FCA has been ramping up its scrutiny of online and often illegal financial promotions, having observed a significant increase in notoriety of “finfluencers” and the potential for consumer harm taking place among users online. The regulator is now consulting on extending its guidance to reflect the current ways social media is being used to advertise financial services and products.

Having teamed up with the Advertising Standards Authority, the regulator is aiming to help educate consumers and influencers about the risks involved in promoting financial products. This work has included an infographic, roundtable discussions and live events to build up awareness of the harm that can take place.

FCA engagement has also helped secure changes to the advertising policies of several big tech companies to only allow financial promotions that have been approved by FCA-authorised firms. The regulator indicated it will be continuing this engagement to ensure more is done to protect consumers.

Director, consumer investments at the FCA, Lucy Castledine, said: “We’ve seen a growing number of ads falling short of the guidance we have in place to stop consumer harm.

“We want people to stay on the right side of our rules, so we’re updating our guidance to clarify what we expect of firms when marketing financial products online. And for those touting products illegally, we will be taking action against you.”

Responding to the FCA’s latest plans, chartered financial adviser at Quilter, Rosie Hooper, added: “With its new consultation on financial promotions, the regulator is making it harder for promotions to be approved and is cracking down on harm occurring from unauthorised influencers communicating illegal financial promotions via social media.

“This is long overdue given the spate of social media posts over a number of years that have lured people into high-risk schemes that don’t state the real risks of falling victim to scams on social media which have skyrocketed over recent years.

“This crackdown is particularly needed during the cost of living crisis as people are more likely to turn to alternative sources with the promise of high returns being tempting for cash-strapped individuals without their eyes open to risks involved.”

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