Regulator cracks down on illegal ‘finfluencers’

The Financial Conduct Authority (FCA) is interviewing 20 finfluencers under caution as it launches targeted action against those who may be touting financial services products illegally.

The regulator has also issued 38 alerts against social media accounts operated by finfluencers which may contain unlawful promotions.

Finfluencers are social media personalities who uses their platform to promote financial products and share advice with their followers, despite not having the authorisation to do so by the FCA and being unqualified to be giving financial advice.

Increasing numbers of young people are falling victim to scams, and the FCA has suggested that finfluencers can often play a part. Figures from the regulator have shown that 62% of 18 to 29-year-olds follow social media influencers, 74% of those said they trusted their advice and nine in 10 young followers have been encouraged to change their financial behaviour.

“Finfluencers are trusted by the people who follow them, often young and potentially vulnerable people attracted to the lifestyle they flaunt,” said joint executive director of enforcement and market oversight at the FCA, Steve Smart.

“Finfluencers need to check the products they promote to ensure they are not breaking the law and putting their followers' livelihoods and life savings at risk.”

Responding to the FCA action, director of personal finance at AJ Bell, Laura Suter, said that consumers should “tread carefully” when researching financial products and investments online.

“Too many people blindly trust anything they see on social media, but throw in a well-known celeb or a reality TV star endorsing a product and people are even more likely to trust a post,” Suter added.

“This isn’t a huge problem if you buy some dodgy beauty products or sign up to a duff subscription, but if you put your life savings into an investment because someone from the TV said they made impressive returns, that could be life changing.

“The regulator is sending a clear message that finfluencers are responsible for ensuring any financial product they endorse is legitimate and that they will be held personally accountable for breaking the rules.”



Share Story:

Recent Stories


FREE E-NEWS SIGN UP

Subscribe to our newsletter to receive breaking news and other industry announcements by email.

  Please tick here to confirm you are happy to receive third party promotions from carefully selected partners.


Helping the credit challenged get mortgage ready
A rising number of borrowers are finding it harder to access mortgages due to being credit challenged - whether that’s from historic debts, a county court judgment, or having little to no credit history.

In the latest episode of the Mortgage Insider podcast, Phil Spencer is joined by Eloise Hall, Head of National Accounts at Kensington Mortgages, and Alastair Douglas, CEO of TotallyMoney.


Inside the world of high net worth lending
The mortgage market continues to evolve, and so too does the answer to the question: what is a high net worth individual in today’s market? In this episode of the Mortgage Insider podcast, host Phil Spencer is joined by Stephen Moroukian, Head of Product and Proposition for Real Estate Financing at Barclays Private Bank, and Islay Robinson, founder and CEO of Enness Global. Together, they explore what brokers really need to know when supporting high net worth individuals.

The future of the bridging industry and the Autumn Budget
MoneyAge content editor, Dan McGrath, is joined by head of marketing at Black & White Bridging, Matt Horton, to discuss the bridging industry, the impact of the Autumn Budget and what the future holds for the sector.