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Social media influencers who promote products or services they are not authorised to promote are being targeted as part of a crackdown that previously saw three Love Island contestants charged.
Biggs Chris, Jamie Clayton and Rebecca Gormley, who appeared on the popular ITV dating show, were last year charged with issuing unauthorised communications of financial promotions on their social media platforms.
The Financial Conduct Authority (FCA) said the promotions were for a type of high-risk trading contract.
A trial date has been fixed for 2027 and the FCA urged anyone who had suffered losses related to the scheme to get in touch. All three deny the charges.
Now, the FCA has launched a joint campaign with national regulators to clamp down on illegal behaviour by so-called “finfluencers” – social media personalities discussing personal finance.
During a week of planned action from the start of June, three people were arrested and seven cease and desist letters sent out, along with 50 warning alerts.
A huge number of accounts on social media platforms, including TikTok and Instagram promote advice or tips on money-related matters.
While many are of the common-sense variety or share approaches they have used themselves, others have gone further in promoting financial products they are not licensed for.
Steve Smart, joint executive director of enforcement and market oversight at the FCA, said: “Our message to finfluencers is loud and clear. They must act responsibly and only promote financial products where they are authorised to do so – or face the consequences.”
Equivalent regulators in nations including Canada, Australia, Italy, Hong Kong and the UAE are also driving the push for action by joining the crackdown.
James Alleyne, from the financial services regulatory team at Kingsley Napley, said: “The FCA first warned those advertising and trading investments on social media about the risks of doing so in March 2024 and has subsequently been extremely assertive in its approach […] and has not hesitated to issue criminal proceedings where it believes someone has crossed the line in terms of providing advice or conducting other regulated business.”
A significant number of faceless accounts portraying themselves as finance influencers have also been spotted promoting either poor, outdated or even mathematically wrong information across social media.
This is concerns both personal finance and stock market analysis, emphasising the need for people to seek reliable sources when looking to make financial or investment decisions.
