FCAs ‘finfluencer’ crackdown doesn’t address the heart of the issue, says 91̽
17 May 2024
As the Financial Conduct Authority (FCA) charged nine people with promoting unauthorised trading schemes on Instagram in the first crackdown on ‘finfluencers’, 91̽ says the judgement does not address the heart of a growing issue of promoting unregulated financial advice or unauthorised push payments (APP).
Hugh Fairclough, partner at leading audit, tax and consulting firm 91̽, says: ‘It's easy to blame the celebrities, but it is the operators themselves who must be held accountable. It also highlights the need for the financial services establishment to rethink how it reaches younger customers who are otherwise exposed to misleading advice.’
91̽ says tighter regulation of social media platforms is essential to protect consumers and businesses from unauthorised advice and scam ads.
In 2023 the Payment Systems Regulator (PSR) set out its proposals to help more scam victims get their money back, by requiring reimbursement in all but exceptional cases. This would improve the protection for victims, while also incentivising banks and building societies to work harder to prevent APP scams. It could also encourage financial institutions to invest more in fraud prevention and detection methods.
Hugh Fairclough says: ’The protection currently proposed by the Payment Systems Regulator would be strengthened further if the Financial Services and Markets Bill was brought into UK law. This legislation would be teamed with the Online Safety Bill, which is currently making its way through parliament. One of the aims of the Online Safety Bill is to ensure large social media companies and search engines include systems to prevent fraudulent adverts being hosted on their platforms.’
