The Financial Conduct Authority (FCA) is interviewing 20 finfluencers under caution, as it launches targeted action against financial services products being promoted illegally.
While not naming the individuals, the regulator said the combined following of their Instagram accounts was 4.5 million. Each was interviewed voluntarily under caution using the FCA’s criminal powers.
Steve Smart, joint executive director of enforcement and market oversight at the FCA, noted the substantial risk of young people idolising a certain lifestyle, and the danger of influencers promoting FS products to them.
“Finfluencers are trusted by the people who follow them, often young and potentially vulnerable people attracted to the lifestyle they flaunt,” said Smart.
Many of their followers may be relatively young, inexperienced with financial services and therefore impressionable. Some 62% of 18 to 29-year-olds follow social media influencers, according to the FCA’s research, with 74% saying they would trust their followed influencers’ advice,
Today, the regulator also announced it had issued 38 alerts against social media accounts operated by finfluencers that may contain unlawful promotions.
In June, the FCA brought charges against nine celebrities, over promoting unauthorised investment schemes. This followed guidance it issued in March for firms operating within the sector.
The risk of falling victim to online scamming is a growing issue, according to the FCA, with young people being a common target. Its research shows that 9 in 10 of young followers have even been encouraged to change their financial behaviour.
“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,” said Smart.
Without FCA authorisation, no individual or company is legally permitted to offer financial advice.
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