The Financial Conduct Authority required firms to amend or remove 8,582 promotions during 2022 as it stepped up pressure on companies to protect consumers.
The figure is 14 times higher than in 2021, when the FCA blocked 573 promotions.
The FCA also published over 1,800 alerts to help prevent consumers from losing their money to scams, amid concern that the cost-of-living crisis may make individuals more susceptible to scammers or adverts showing high risk, unregulated products.
According to the watchdog, social media remains a major focus for its work in combatting misleading promotions. It has worked alongside big tech companies to change their advertising policies to only allow financial promotions that have been approved by FCA-authorised firms.
‘Fin-fluencers’ have also been a growing concern for the regulator, stating that unauthorised individuals should not advise people on the merits of certain investments.
Sarah Pritchard, executive director, markets, FCA, said: “Our expectations remain the same. Financial promotions must be fair, clear and not misleading. What has changed is the FCA’s approach. By drawing on better technology, we’re finding poor quality or misleading ads quicker. And where we find them, we’re stepping in to make firms improve them or remove them entirely.
‘This year, we will continue to put the pressure on people using social media to illegally promote investments, which put people’s hard-earned money at risk.”
The Personal Investment Management & Financial Advice Association (PIMFA) welcomed the FCA’s crackdown, but called upon the regulator to have a greater role alongside Ofcom to prevent fraud on social media platforms and search engines under the provisions set out by the Online Safety Bill.
David Ostojitsch, director of government relations and policy at PIMFA, commented: “We welcome the news that the FCA has blocked more misleading financial promotions in 2022 compared with the year before. It is vital that the public is protected from online fraud, and the devastating impact it can have on people’s lives. But, as the FCA says, more must be done by search engines and social media platforms to protect the public from fraud.
“Provisions contained within the Online Safety Bill to place a duty of care on social media platforms to remove harmful content will help to build on the progress made. However, this does shine a light on some of the shortcomings within the Bill, namely that Ofcom, rather than the FCA, will be charged with defining what is and what is not harmful content. We would encourage all parties to consider how the FCA can take a greater role in identifying harmful content as outlined in the Bill.”
