A total of 4,151 financial promotions were subject to intervention by the UK Financial Conduct Authority (FCA) between July and September, according to Q3 data published by the regulator. That’s the highest quarterly figure since it started publishing data.
Some 95% of amendments or withdrawals occurred in the retail lending, investments and banking sectors. One intervention led to 66 buy-now-pay-later (BNPL) promotions from one firm, issued across various social media platforms, being withdrawn.
High risk
Mark Steward, Executive Director of Enforcement and Market Oversight at the FCA said: “As consumers feel the financial squeeze, they could be tempted by high risk, unregulated products and services or they could become a target for scammers preying on moments of vulnerability.
“As a result, we’re doing even more to tackle false claims in adverts, issue prompt warnings to consumers, and we continue to engage with the largest tech and social media platforms as they also play an important part in protecting consumers from online harm. This is why changes to the Online Safety Bill to cover paid-for financial services advertising online are very much needed right now.”
Other key findings from the report include”
- 6,243 reports about potential unauthorized business were received;
- 340 promotions were reviewed;
- 303 alerts were issued about unauthorized firms and individuals – 20% relating to clone scams;
- 27,000 Dear CEO letters were issued warning that financial promotion of BNPL products must comply with financial promotion rules.
The report draws attention to growth in the number of instances of scammers targeting consumers searching online for investment opportunities, either through Google or on social media sites such as Facebook, Instagram or YouTube.
In one instance, a company’s website and social media account was providing trading signals on what appeared to be a live basis to over 70,000 followers. The FCA issued an alert and asked for the posts to be removed within 24 hours of the issue being identified.