Watchdog bites as war on illegal finance ads escalates

City watchdog the Financial Conduct Authority has urged social media platforms to do more to combat the escalating problem of illegal and misleading finance marketing after taking action against over 20,000 individual ads – a 100% increase on last year’s figure and up over 3,400% since 2021.

The increase in action has been made possible by an expanded team of data specialists, which includes experts in artificial intelligence, analytics and data science as well as cloud engineering and digital technology.

Back in 2021, before the team was expanded, the FCA took action on just 564 ads, and even that was double the number compared to previous years.

The main sectors which appear to be fuelling the increase include ads for cryptoasset, debt solutions, and claims management companies (CMC), with the latter accounting for the lion’s share (9,197) of ads that were withdrawn or amended in 2024.

Many of these were for housing disrepair and motor finance claims targeted at vulnerable consumers, featuring the lure of “no win, no fee” offers that often include hidden fees and commissions.

Over the past 12 months the FCA data team identified 480,000 new websites, which could be providing or promoting financial services or products without permission. This resulted in reviews of more than 3,700 websites and social media platforms and led to more than 1,600 alerts to warn UK consumers about these unauthorised firms.

Late last year the regulator also launched targeted action against so-called ‘finfluencers’, resulting in 20 social media influencers being interviewed under caution.

Rules around financial promotions have been bolstered and the regulator now requires firms to obtain FCA permission before approving promotions for unauthorised persons.

The FCA also issued 2,240 warnings about unauthorised or potentially scam firms in 2024.

FCA director of consumer investments Lucy Castledine said: “Over the past year, we have seen a growing number of misleading and illegal financial promotions. We have stepped up our efforts in response to make sure that financial promotions are clear, fair, and accurate.

“We expect firms to take the necessary steps to meet standards and will continue to work with other bodies, including social media platforms, to prevent illegal promotions being pushed at consumers.”