Social media ‘influencers’ grilled by watchdog over product promotions

The City watchdog is grilling social media personalities in a clampdown on illegal promotions of financial service products.

The Financial Conduct Authority (FCA) said 20 social media influencers – dubbed ‘finfluencers’ – are being interviewed under caution.

Increasing numbers of influencers have been giving financial advice they are unqualified to provide in recent years.

Promotions: The Financial Conduct Authority  said 20 social media influencers – dubbed ‘finfluencers’ – are being interviewed under caution

This has sparked concerns because their followers are often young and impressionable.

Regulators are worried that minor celebrities are persuading people to invest in products that are unsuitable, highly risky or even fraudulent.

The FCA would not name the individuals, but said that it is speaking to them voluntarily under caution using its criminal powers.

As part of a wider crackdown, the FCA has also recently named 38 social media accounts on its website, which could be making unlawful promotions. 

The regulator has been focusing on individuals promoting foreign exchange trading – known as FX – and contracts for difference ‘CFD’ trading.

CFDs are high-risk investments used to bet on the price of an asset, including foreign currencies.

Susannah Streeter, head of money and markets for investment platform Hargreaves Lansdown, said: ‘The censure of finfluencers should act as a reminder to celebrities and other influencers about the risks they run if they don’t understand the rules.’

Earlier this year, a handful of reality TV stars, including The Only Way is Essex’s Lauren Goodger, Love Island’s Biggs Chris and Geordie Shore’s Scott Timlin, pleaded not guilty to promoting an unauthorised investment scheme.

A trial has been scheduled for 2027, with the individuals facing up to two years in prison if convicted.