Global Regulators Unite to Tackle Unauthorized Financial Influencer Activity

Regulators, including the UK FCA are clamping down on unauthorised financial promotions and scams across social media.

Financial authorities from multiple jurisdictions have launched an initiative that targets unlicensed online personalities who promote investment products without the proper authorisation. The cooperation between regulators is aimed at addressing concerns about the spread of unregulated financial advice, which is disseminated over social media.

The operation, which commenced in early June, has brought together regulatory bodies from nine countries and different continents.

Which regulators are involved in the enforcement action?

Regulators from the United Kingdom, Australia, Canada, Hong Kong, Italy, and the United Arab Emirates have taken action, demonstrating the global nature of the problem and the need for a coordinated response to it.

In Britain, the Financial Conduct Authority or FCA has worked alongside the City of London Police to execute arrest warrants and initiate formal legal proceedings.
Three individuals were taken into custody, while criminal charges were filed against three suspects. Additionally, four “persons of interest” have been asked to attend formal interviews as part of the ongoing investigation.

Regulators have also issued cease and desist orders to seven entities, while simultaneously publishing 50 warning notices concerning unauthorised promotional activities.
These notices are likely to trigger content takedowns across social media platforms. It’s expected that over 650 individual requests will be submitted to platform operators and standalone websites.

Has this kind of activity been effective in the past?

These latest actions build upon previous regulatory efforts, which have had a significant impact.
Data indicates that nearly 20,000 promotional materials were either modified or completely withdrawn, following previous intervention in 2024.

The focus on content distributed via social media has intensified; at the same time, there has been a realisation that existing oversight measures are no longer fit for purpose in the digital age.

Regulators have acknowledged that social media platforms and influencers have fundamentally changed how financial information is disseminated and consumed.

Traditional regulatory frameworks, designed for conventional media and financial institutions, need to be adapted to address the challenges posed by social media influencers and the platforms they use.

Will the regulator’s actions help to stop the scammers?

These actions may help to establish a template for future regulatory cooperation, particularly as digital financial services continue to evolve and move across traditional jurisdictional boundaries.
This type of action is long overdue; however, our concern is that it barely touches the tip of the Iceberg.

In November 2024, CIFAS, the UK Credit Industry Fraud Avoidance System, published a report that showed scammers and fraudsters had stolen £11.40 bln from individuals and businesses in the UK over the previous 12 months.

Consumers affected lost an average of £1400.00 each. And as many as 1 in 7 UK consumers had been targeted by scammers, a rise of +10.0%, when compared to the data for 2023.

Unsurprisingly, given those statistics, 32.0% of respondents to the Global Anti-Scam Alliance’s State of Scams in the UK survey rated the UK authorities ‘ efforts to deal with online fraud as very poor.

As far as the fraudsters and scammers are concerned, the potential rewards of online fraud far outweigh the risks of being caught. Especially when many of these scams operate offshore and behind the anonymity of the internet.

Whilst we welcome the efforts of the FCA and other regulators, here at the Good Money Guide, we don’t think things will change for the better until the social media platforms themselves are forced to clean up their act and start to prevent this content from reaching unsuspecting consumers in the first place.