Social media ‘influencers’ under fire by city watchdog over product promotions

The City Watchdog is keeping social media personalities under fire to tackle illegal advertising of financial services products.

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

In recent years, more and more influencers have provided financial advice that they are not authorized to provide.

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

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

The FCA will not name the individuals but says it is speaking to them voluntarily and prudently, using its criminal powers.

As part of a wider crackdown, the FCA also recently named 38 social media accounts on its website as potentially making unlawful promotions.

The regulator has focused on individuals who promote foreign currency trading – known as FX – and CFD trading contracts.

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

Susannah Streeter, head of money and markets at investment platform Hargreaves Lansdown, said: ‘The censure of finfluencers should serve as a reminder to celebrities and other influencers of the risks they face 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 illicit investment scheme.

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