A UK watchdog is questioning 20 social media “finfluencers” while warning them about the seriousness of the situation
The UK’s financial watchdog, the FCA, has talked to 20 social media influencers to stop them from illegally promoting financial services. These influencers, known as “finfluencers,” have been questioned under caution. They might face fines or up to two years in prison.
The FCA is looking closely at finfluencers who promote risky investments, like foreign exchange and contracts for difference (CFDs). CFDs allow people to bet on changes in the price of assets, like foreign currencies.
The FCA is also worried that these influencers may be illegally promoting other financial products, such as loans and debt solutions. They are actively searching for and taking action against anyone promoting financial services without the proper permissions.
The watchdog has warned about 38 social media accounts run by finfluencers that might be promoting illegal activities.
More young people are getting scammed, and finfluencers could be a factor, as their numbers have grown significantly in recent years. Almost two-thirds (62%) of people aged 18 to 29 follow social media influencers, and 74% of them trust the advice given. Nine out of ten young followers say an influencer has influenced their financial decisions, according to the watchdog.
Steve Smart, who works at the FCA, said: “Finfluencers are trusted by their followers, who are often young and vulnerable. They are drawn to the lifestyle that these influencers show.
“Finfluencers need to be careful about the products they promote to make sure they aren’t breaking any laws and risking their followers’ money and savings.”
Natalie Sherborn, a partner at the law firm Withers, said, “This recent action shows that the FCA is seriously addressing the threat from social media and is ready to act quickly and firmly against it. People and companies should pay attention.”
Published: 22nd October 2024
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