Regulators have joined forces for an international crackdown to protect social media users from rogue promotions by some financial influencers, or “finfluencers”.
The week of action started on June 2 and involved the Financial Conduct Authority (FCA) in the UK as well as regulators from Australia, Canada, Hong Kong, Italy and the United Arab Emirates.
In the UK, the FCA has issued 50 warning alerts, which the regulator said will result in more than 650 take down requests on social media platforms and more than 50 websites operated by unauthorised finfluencers.
It has also sent seven “cease and desist” letters, and invited four finfluencers for interview.
The FCA said it has also made thee arrests with the support of the City of London Police and authorised criminal proceedings against three people.
Finfluencers are social media personalities who may promote financial products and share insights and advice with their followers.
Many are acting legitimately and not breaking any laws – but others may tout products or services illegally and without authorisation through online videos and posts, where they use the pretence of a lavish lifestyle, often falsely, to promote success, the regulator said.
The FCA said it has also made thee arrests with the support of the City of London Police and authorised criminal proceedings against three people.
Steve Smart, joint executive director of enforcement and market oversight at the FCA, said: “Our message to finfluencers is loud and clear. They must act responsibly and only promote financial products where they are authorised to do so – or face the consequences.”
Meanwhile, the Treasury Committee said it had sent a letter to Meta, owners of Facebook and Instagram, asking for information on its approach to financial influencers.
The committee said the correspondence follows evidence from FCA officials to the committee in April that it had taken Meta up to six weeks to act on alerts on individual influencers.
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