FCA slams social media firms for hosting illegal adverts
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Social media platforms are not doing enough to uphold their own policies to block illegal content, the Financial Conduct Authority has said, with two-thirds of more than 1,200 illegal ads coming from firms and people already on its warning list.
The FCA has made 120 account takedown requests to social media platforms hosting illegal finfluencer content, containing 1,267 illegal financial adverts which reached more than 2.3m UK accounts.
Social media has been recognised as a key conduit for scams as more people look to ‘finfluencers’ for money advice, but promoting a regulated financial product or service without the approval of an FCA-authorised person, or providing financial advice without being FCA-authorised, can be a criminal offence.
However, the regulator has criticised social media companies for not applying their own rules; of the 1,267 illegal ads highlighted by the FCA to social media platforms, two-thirds (66%) were by firms or individuals that were already on the FCA's Warning List.
The watchdog is now calling for social media platforms to step up and play a more proactive role in stopping illegal financial promotions at source.
In a ‘week of action’ starting on 20 April, 17 global regulators undertook enforcement activity, consumer awareness campaigns and educational programmes for finfluencers who want to act responsibly. A similar initiative was held with eight regulators in June last year.
"This collective push with international partners is vital in helping to protect millions of consumers from harm. We will only make real progress in the fight against financial crime if every part of the system plays its role - including social media firms,” said the FCA’s executive director of enforcement and market oversight, Steve Smart.
Along with the FCA, the regulators taking part in the week of action are:
- Australia, Australian Securities & Investments Commission (ASIC)
- Belgium, Financial Services and Markets Authority (FSMA)
- Brazil, Comissão de Valores Mobiliários (CVM)
- Canada, Autorité des marchés financiers (QAMF)
- Canada, BC Securities Commission (BCSC)
- Canada, Ontario Securities Commission (OSC)
- Denmark, Danish Financial Supervisory Authority (DFSA)
- Hong Kong, Securities and Futures Commission (SFC)
- India, Securities and Exchange Board of India (SEBI)
- Ireland, Central Bank of Ireland (CBI)
- New Zealand, Financial Markets Authority (FMA)
- Norway, Finanstilsynet (NFSA)
- Qatar, Qatar Financial Centre Regulatory Authority (QFCRA)
- Qatar, Qatar Financial Markets Authority (QFMA)
- Singapore, Monetary Authority of Singapore (MAS)
- United Arab Emirates, Capital Market Authority (CMA)
