UK Regulator Blocked 14X More Misleading Financial Promotions in 2022

Financial Conduct Authority

The U.K.’s financial regulator sent out over 1,800 alerts last year to protect consumers from financial scams.

In a Friday (Feb. 3) press release, the Financial Conduct Authority (FCA) said it required firms to amend or remove 8,582 promotions during 2022, a 14-fold increase from the previous year.

The regulator said the increase was driven by “significant improvements” to the digital tools it uses to identify problem firms and misleading advertisements, per the release.

It also pointed to the importance of social media in its work combatting misleading financial promotions. The FCA said social media is a “major focus” of its efforts and it has worked closely with Big Tech companies to change their advertising policies so that they only allow ads that have been approved by FCA-authorized firms.

However, the FCA cautioned that “more needs to be done by tech companies to protect consumers.”

The regulator also pointed to the rising threat of what it calls “fin-fluencers” — unauthorized individuals giving investment advice. It emphasizes that such activity is subject to regulations, stating that it has already acted against several unauthorized social media influencers over the past year.

In one case, the FCA said it found a director of a regulated firm using their personal social media profile to promote the advice of unauthorized traders and other financial products. In that instance, FCA blocked the director from using their personal social media to promote financial services and imposed a requirement on the firm to halt any financial services promotions.

“Financial promotions must be fair, clear and not misleading,” Sarah Pritchard, executive director, markets at the FCA, said in Friday’s press release. “By drawing on better technology, we’re finding poor quality or misleading ads quicker. And where we find them, we’re stepping in to make firms improve them or remove them entirely.”

As PYMNTS has reported, the FCA has also proposed enhanced measures to clamp down on unfair or misleading marketing by crypto asset service providers and buy now, pay later (BNPL) loan providers.

For all PYMNTS EMEA coverage, subscribe to the daily EMEA Newsletter.