England’s financial watchdog said social media platforms are not properly policing illegal financial promotions.
The Financial Conduct Authority (FCA) called for greater action against “finfluencers” on Friday (April 24), following a week of worldwide regulatory action on the topic.
“This collective push with international partners is vital in helping to protect millions of consumers from harm,” Steve Smart, executive director of enforcement and market oversight at the FCA, said in a news release.
“We will only make real progress in the fight against financial crime if every part of the system plays its role — including social media firms.”
In the U.K. last week, the FCA secured a guilty plea from mixed martial artist/reality TV star Aaron Chalmers for illegal promotions on social media.
The regulator said it also sent four “targeted warning letters” to people suspected of engaging in unauthorized financial promotions and made 120 account takedown requests to social platforms hosting illegal finfluencer content.
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The FCA said these accounts included 1,267 illegal financial advertisements, which reached at least 2.3 million users in the U.K.
Research by PYMNTS Intelligence has shown that social platforms such as TikTok have become key sources of financial information, especially for millennials and Gen Zs. In 2023, 80% of these age groups said they sought advice through these channels.
As covered here in 2024, this shift has democratized access to financial knowledge, breaking down traditional barriers and driving greater inclusivity.
“However, the rise of ‘finfluencers’ — popular yet potentially unqualified individuals offering financial guidance — introduces significant risks,” that report added. “Misinformation and biased advice, amplified by algorithmic content distribution, can lead consumers astray, emphasizing the necessity for vigilant oversight.”
More recently, PYMNTS monitored the way social media companies are becoming the “front door” to financial services, as these platforms institute payments integrations and make new moves into lending.
Research from PYMNTS Intelligence shows that consumers engage across multiple digital activities throughout the day — such as communication, shopping and banking — often within the same device and session. That means that financial decisions are increasingly made within broader digital routines. That change in behavior is giving platforms that control attention a direct path into everyday financial life.
“The pattern is consistent across platforms. Payments establish presence. Lending builds on top of that,” PYMNTS wrote.
This model is illustrated by TikTok’s recent push into Brazil, with that company seeking licenses to offer digital wallets, move funds and facilitate lending connections between users and financial partners.
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