The Financial Conduct Authority (FCA), an independent government watchdog, issued guidelines for UK-based influencers promoting financial products on social media.
In a press release on March 26, the regulatory body said influencer marketing for financial products must be “fair, clear, and not misleading.” The full guidelines note that if an investment is high-risk, an influencer must communicate that risk clearly. The FCA specifically warns influencers against promoting unregulated crypto projects.
As the FCA pointed out, promoting financial products without the right permissions through its organization could be a crime.
“Consumers need to be alert to dubious adverts and scams online. But it is important that influencers ensure they’re on the right side of the rules and consider what would happen to their own reputations if they’re found to promote products illegally,” the FCA blog post adds.
According to the FCA, scrutiny of financial products has “ramped up.” In 2023 alone, the group says they removed over 10,000 misleading adverts, up from approximately 8,500 in 2022.
“Promotions aren’t just about the likes. They’re about the law,” Lucy Castledine, Director of Consumer Investments at the FCA, said in a press release. “We will take action against those touting financial products illegally.”
While this FCA guidance is UK-specific, influencers touting misleading financial projects is a widespread problem across the creator economy. Think of infamous cases like Logan Paul’s Crypto Zoo scandal or the ‘Scamley Nickels’ bait-and-switch Kickstarter crypto scheme.
If this increased scrutiny is effective in the UK, perhaps regulatory bodies in other countries will follow the FCA’s example.
