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UK Financial Watchdog is asking big tech groups to do more to stop the “mall” problem of switching social media accounts and continuing to promote fraudulent financial schemes and businesses.
Many “Finfluencers” continued to operate after financial conduct officials requested that they close down by simply switching their social media accounts to something else, regulators told MPS on Wednesday.
“That content cannot pop up in 12 hours,” Lucy Castreid, FCA’s director of consumer investment, told the House Treasury Select Committee. “That’s a big call for action.”
“At this point, we have to submit individual account takedowns,” Castledine said. “Big tech platforms have the technology to identify this, otherwise they need to be proactive and proactive about it.
Last year, the FCA received 25,000 reports from unauthorized businesses, she said.
The FCA is trying to crack down on Social Media Influuseers, the Finfluencers, which promotes financial planning or trading strategies without permission, after releasing guidance on such promotions and began prosecuting those who broke that rule last year.
Watchdog charged nine people in 2024. The former star reality TV show Love Island and the only way is to Essex. Nine cases are not scheduled to come to court until 2027.
Castlein said after showing MPS a video of an illegal Finfluencer social media promotion featuring luxury cars and homes, the regulators are in discussion with the government about a law that would introduce strict sentences for those who break the law in this area.
Castlein said the aim was to increase the maximum sentence from two to five years for crimes that communicate fraudulent financial promotions under the Financial Services and Markets Act of 2000.
“Essentially this content is illegal,” she said. “It drives people to share money. It’s a recurring theme that we see, a growing trend. People need to sit and take action.”
She said that people don’t need to be followers of Finfulencers to show their promotion, as social media sites’ algorithms often push their content based on viewing history.
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“There are many cases where things that have been promoted have turned out to be fraud or a scam that loses a significant, if not all, if not all,” Steve Smart, co-executive director of enforcement and market surveillance at the FCA.
The two main types of Finfluencers were fraudsters and people who provided fraudulent financial advice, such as recommending others to follow a trading strategy.
Labour MP Dame Meg Hillier, who chairs the committee, said that Finfluencers has not been convicted yet, “drops his jaw.” “It sounds like there’s a lot to do, but I think these online platforms are clearly responsible.”
