Scams: FCA blocks more than 10,000 ads from Instagram, Facebook and YouTube
More than 10,000 misleading financial promotions and scams aimed at consumers via social media sites such as Instagram, Facebook, YouTube and TikTok have been identified and targeted by the financial watchdog during the past year.
The Financial Conduct Authority (FCA) said the use of social media marketing channels and the rise of so-called “fin-fluencers” – particularly directing investment products at younger age groups – exploded last year, resulting in a record number of takedown notices and alerts.
The FCA ordered businesses to amend or remove 8,582 promotions during 2022, 15 times the 573 recorded the previous year. It also published almost 1,900 alerts to consumers about potential scammers, up more than a third up on 2021.
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Google, which owns YouTube, Meta, which owns Instagram and Facebook, TikTok, Twitter and Microsoft’s Bing have changed advertising policies to ensure that regulated firms are involved in adverts for financial products after FCA intervention. However, the regulator said it was still monitoring whether the companies were effectively blocking illegal adverts.
“More needs to be done by tech companies to protect consumers,” the FCA said. “Given the substantial number of illegal promotions we continue to identify, our expectation is that every social media platform improves their capability to identify and remove the illegal financial promotions on a proactive basis.”
The crackdown included taking action against a company that attempted to take advantage of the cost of living crisis, targeting more than 70,000 online followers that the FCA deemed were potentially vulnerable consumers.
An online retail broker with more than 1.1 million UK customers, with a primary market of millennial age investors, was ordered to halt a marketing campaign after the FCA identified “serious concerns” that its promotions, which used social media influencers, were “targeting vulnerable customers with significant debt”.
The FCA also sought to get an unregistered cryptocurrency exchange offering products to UK consumers to be shut down, and separately alerted 55 consumers who had been identified on a scammers list targeting consumers who had been searching for loans online.
“Financial promotions must be fair, clear and not misleading,” said Sarah Pritchard, executive director, markets, at the FCA. “This year, we will continue to put pressure on people using social media to illegally promote investments, which put people’s hard-earned money at risk.”
The FCA said advances in the technology it uses to identify problem firms and misleading adverts had also fuelled the increase in cases last year. It has hired more than 100 people in roles such as machine learning and data analysis to build automated tools to scan thousands of websites every day.
The watchdog said it looked at about 180,000 websites last year, resulting in about 4,500 websites and social media platforms being reviewed. This resulted in 1,441 alerts being issued and 400 of the offending websites being taken down.
Last year, the Advertising Standards Authority sent enforcement notices to 50 firms in the cryptocurrency sector warning them that they must clearly explain the risks for potential investors.
The watchdog slapped bans on a bitcoin firm for urging that it was “time to buy” or miss out, and on football club Arsenal’s campaign to get fans to buy its crypto “tokens”.