The Financial Conduct Authority (FCA) in the UK has announced it joined forces with regulators across the globe to fight against illegal finfluencers.
In the UK, the FCA already issued 50 warning alerts and seven cease and desist letters as a response to fake financial claims from influencers. It has also made three arrests with the support of the local police in London and authorised criminal proceedings against various individuals.
According to the FCA, finfluencers must act responsibly and only promote financial products they are authorised to do. Its warning alerts will result in more than 650 take down requests on social media platforms and over 50 websites operated by illegal finfluencers.
The FCA started warning against fake advertisers of trading investments on social media since March 2024, aiming for more financial responsibility and more transparency about the risks involved in trading alternative financial assets. Those who promote complex and high-risk products represent a key driver of consumer harm and therefore, the FCA must impose measures to protect millions of consumers at risk.
Unfortunately, many of these accounts are based outside the UK, which makes it difficult for the FCA to react without coordinated law enforcement agencies across the border.
By recently partnering with regulators from various other global territories, the FCA aims to send a clear message to fake finfluencers and raise awareness about the damaging effects of irresponsible trading.
Worldwide, several international regulators took similar actions, showcasing the magnitude of the problem.
At the same time, social media platforms must also take more responsibility regarding the content they allow to be shared with a wide and influenceable audience. However, with limited governance, the social media giants cannot be forced to monitor and police influencers to protect vulnerable consumers.
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