In 2024, the Financial Conduct Authority (FCA) significantly ramped up its efforts to address issues of misleading financial promotions. The rise in misleading advertisements, particularly targeting vulnerable groups, has led to a surge in the FCA’s regulatory actions and a call for broader industry collaboration. With nearly 20,000 promotions either amended or withdrawn in 2024, the FCA’s measures are more robust than ever before.
FCA’s 2024 financial promotions data
The FCA’s latest data on financial promotions highlights a critical issue: consumers are increasingly exposed to misleading or high-risk financial products. The regulatory body’s data reveals that financial promotions have become more pervasive, especially in digital spaces, where social media platforms play a pivotal role in the dissemination of such content.
In response to this surge, the FCA has amplified its focus on addressing misleading financial promotions by adopting a more proactive and interventionist stance. The data underscores the growing importance of maintaining the integrity of financial promotions, particularly in an age when digital advertising can quickly reach a broad audience. A notable aspect of the FCA’s increased action is its collaboration with other regulators, enforcement bodies, and social media platforms to identify and eliminate these harmful practices.
Stronger regulatory actions and industry cooperation
One of the key developments in 2024 is the introduction of the Section 21 Gateway. This new regulation requires firms to seek FCA approval before approving financial promotions made by unauthorised parties. The Section 21 Gateway is a direct response to the rise of social media influencers—often known as ‘finfluencers’—who have been promoting financial products without proper oversight or understanding of the potential harm caused. The FCA has intensified its scrutiny of these promotions, ensuring that consumers are protected from misleading information that could lead to poor financial decisions.
In 2024 alone, the FCA interviewed 20 individuals under caution regarding their involvement in promoting misleading financial products. This represents a significant shift towards holding influencers accountable for their role in spreading harmful content, marking a crucial development in the evolution of digital financial marketing.
FCA’s call for social media platforms to take action
A major area of concern for the FCA has been the use of social media platforms in financial promotions. The FCA has urged platforms to do more to prevent the spread of illegal or misleading content, particularly when it comes to financial services. Social media has become a powerful tool for both legitimate and rogue marketers to reach vulnerable consumers, and the FCA’s call to action seeks to ensure that platforms take greater responsibility in policing such content.
Lucy Castledine, Director of Consumer Investments at the FCA, emphasised the importance of cross-industry collaboration in tackling these issues. This includes working with platforms like Instagram, YouTube, and TikTok, which have become central to the promotion of financial products. Castledine’s comments highlight the FCA’s ongoing commitment to safeguarding consumers, especially those most at risk of financial harm.
The FCA’s approach to consumer protection
Beyond targeting individual promotions, the FCA is actively working to ensure that all financial promotions—whether they are for high-risk investments or loans—are clear, fair, and accurate. The regulator’s efforts are focused on preventing deceptive practices that could lead to consumers making uninformed decisions based on misleading or incomplete information. Through its actions, the FCA has said it aims to create a more transparent environment where consumers are equipped with the knowledge they need to make better financial choices.
Looking ahead
The FCA’s increased vigilance and regulatory actions in 2024 reflect an evolving approach to consumer protection in an increasingly digital world. As financial promotions continue to migrate to digital spaces, especially on social media, the FCA’s role will be critical in curbing harmful practices and maintaining trust in the financial system.
By introducing measures like the Section 21 Gateway and working closely with social media platforms and influencers, the FCA is setting a precedent for the future of financial marketing. The regulator’s actions in 2024 are a clear indication that it will continue to adapt and evolve its strategies to ensure that consumers are not exposed to misleading, high-risk financial products. It’s important that firms stay up to date on the FCA’s approach to financial promotions.
