In a joint statement released on April 6, the Financial Conduct Authority (FCA) and the Advertising Standards Authority (ASA) have warned finfluencers, social media influencers who promote financial products, about the risks involved in promoting illegal financial products. The statement lays out a seven-point checklist for finfluencers to ensure that they stay within the bounds of the law.
The FCA and ASA have partnered with social media influencer Sharon Gaffka to educate finfluencers about the risks involved in promoting financial products. The partnership includes an infographic designed for influencers, setting out what they should check before accepting brand deals for financial products and services.
The statement also reveals that the FCA and ASA will engage with influencers and their agents, providing them with clear information about what could be an illegal financial promotion. The FCA will also be inviting influencer agents and the Influencer Marketing Trade Body to an open roundtable discussion on illegal financial promotions.
The FCA and ASA have grown increasingly concerned about the misuse of social media by influencers and the harm this can cause their followers. The partnership with Sharon Gaffka and the seven-point checklist aim to ensure that influencers stay on the right side of the law and prevent them from unknowingly introducing their followers to scams or high-risk investments.
According to Sarah Pritchard, Executive Director, Markets, the FCA has seen more cases of influencers promoting products they shouldn’t be, often without knowledge of the rules and without understanding the harm they could cause their followers. Pritchard emphasized that the FCA wants to work with influencers to keep them on the right side of the law, as this will also help protect people from being shown scams or investments that are too risky.
Miles Lockwood, Director of Complaints and Investigations, noted that the FCA has worked hard to ensure that influencers are equipped with the training and advice they need to help them advertise responsibly. However, Lockwood acknowledged that there are still problems, particularly around financial products, which is why the FCA is partnering with the ASA and Sharon Gaffka to educate influencers about the risks and responsibilities around marketing these products.
The FCA and ASA’s warning to finfluencers follows the recent publication of the FCA’s annual financial promotions report, which revealed that intervention by the regulator led to 8,582 promotions being amended or withdrawn during 2022 – 14 times more than 2021. The FCA also published 1,882 consumer warnings on its website relating to unauthorized activities.
The FCA’s partnership with Sharon Gaffka and the ASA is a significant step in protecting consumers from illegal financial promotions. The FCA will continue to work with other regulatory partners to collaborate and lead to better results.
