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.”

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