The Financial Conduct Authority (FCA) has joined forces with regulators across the globe to crack down on illegal financial promotions by rogue finfluencers.

During a “week of action”, the FCA said it made three arrests with the support of the City of London Police, authorised criminal proceedings against three more individuals, and sent seven cease and desist letters.

Additionally, it issued 50 warning alerts which it claims will result in over 650 take down requests on social media platforms and more than 50 websites operated by unauthorised finfluencers.

Finfluencers are social media personalities who use their platform to promote financial products and share insights and advice with their followers.

The FCA said that many are acting legitimately and not breaking any laws.

However, some individuals are touting 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.

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.”

Commenting on the news Terry Green, social media partner at international law firm Katten Muchin Rosenman LLP (Katten) said that while there has been a lot of coverage on protecting people from harmful behaviours and illegal materials online, the Online Safety Act’s wide remit also mandates the protection of people from fraud and financial offences.

“Online platforms will be expected to assess the risk of people being defrauded or being taken advantaged of by people carrying out regulated activities when they have not been authorised by the FCA, such as providing financial advice or conducting financial promotions,” he added. “The Online Safety Act specifically highlights this as one of the 17 types of illegal content and online platforms must conduct a risk assessment on in relation to the likelihood and harm of this occurring on their platform.

“Whilst the FCA has targeted specific social media users, Ofcom will go after the social media and online platforms that are enabling this. We may expect to see more cooperation between the FCA and Ofcom to tackle these types of content online.”

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