20 finfluencers are being interviewed under caution by the Financial Conduct Authority (FCA), as it launches targeted action against finfluencers who may be touting financial services products illegally.
The FCA also issued 38 alerts against social media accounts operated by finfluencers which may contain unlawful promotions.
Increasing numbers of young people are falling victim to scams, and finfluencers can often play a part. Nearly two-thirds (62%) of 18- to 29-year-olds follow social media influencers, 74% of those said they trusted their advice and 9 in 10 young followers have been encouraged to change their financial behaviour.
Steve Smart, joint Executive Director of Enforcement and Market Oversight at the FCA said:
“Finfluencers are trusted by the people who follow them, often young and potentially vulnerable people attracted to the lifestyle they flaunt.
“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.”
Background
- Finfluencers are social media personalities who uses their platform to promote financial products and share insights and advice with their followers; there has been a significant increase in finfluencers over recent years. These people are not FCA authorised and are unqualified to be giving financial advice to the younger and often very impressionable age groups who follow them.
- The FCA is unable to name those targeted for interview.
- The individuals were interviewed voluntarily under caution using the FCA’s criminal powers.
- The FCA has already taken action against nine individuals and finfluencers for promoting an unauthorised trading scheme.
- Consumers should check the FCA’s warning list before making any decision about how to invest their money. The FCA’s InvestSmart page contains useful information to help people make better investment decisions.
