Influencers interviewed under caution over ‘get-rich-quick’ promotions

A clampdown on social media influencers who illegally plug financial products online has intensified after the City regulator revealed it was interviewing 20 people under caution.
The move by the Financial Conduct Authority comes after it separately brought charges against nine people in May over an unauthorised trading scheme promoted by so-called finfluencers, or financial influencers, online.
The watchdog has become increasingly concerned about the explosion in recent years of influencers using their social media clout on platforms such as TikTok and Instagram to tout products and get-rich-quick schemes.
It warned in July last year that a “large number” of these promotions were illegal or non-compliant and that some influencers knew little about the schemes they were marketing. In March, the authority published new guidance for adverts promoting financial services on social media.
It is now taking “targeted action” to further tackle the problem. As well as interviewing 20 influencers voluntarily under caution, the regulator has also published 38 warnings on its website about “finfluencer” social media accounts that might be publishing promotions that are unlawful.
Nearly two thirds of people aged 18 to 29 follow social media influencers, with three quarters of those saying they trust their advice, and nine in ten young people saying they have been encouraged to change their financial behaviour, the regulator said.
Steve Smart, the authority’s joint executive director of enforcement and market oversight, said: “Finfluencers are trusted by the people who follow them, often young and potentially vulnerable people attracted to the lifestyle they flaunt.
“Finfluencers need to check the products they promote to ensure they are not breaking the law and putting their followers’ livelihoods and life savings at risk.”
Two years ago Kim Kardashian, the American celebrity, was fined $1.26 million by the US Securities and Exchange Commission to settle charges she had promoted a crypto asset without disclosing she had been paid $250,000 for the endorsement.
The regulator said people should check the FCA’s warning list before making any decisions about how to invest their money.