The Financial Conduct Authority (FCA) intervened to amend or withdraw 4,151 financial promotions between July and September 2022, the highest since it started publishing the data.
Retail lending, investments and banking are the sectors with the highest rate of amends to or withdrawal of adverts at 95% of the FCA’s interventions with authorised firms.
Financial promotions 2022 Q3 data
| Category | Pensions and Retirement Income | Retail Investments | Retail Banking | Retail Lending |
|---|---|---|---|---|
| Cases by Sector | 249 (6%) | 996 (24%) | 996 (24%) | 1,910 (46%) |
The regulator highlighted that it had seen several cases involving unauthorised firms and individuals seeking to take advantage of the rising cost of living. During the period, the FCA issued 303 warnings about unauthorised firms and individuals, with over 20% about clone scams. This followed receiving 6,243 reports about potential unauthorised business during Q3 2022.
The FCA also said it is aware that scammers are targeting consumers searching for investments online, in particular through search engines such as Google and social media platforms such as Facebook, Instagram or YouTube.
Mark Steward, executive director of enforcement and market oversight at the FCA, said: “As consumers feel the financial squeeze, they could be tempted by high-risk, unregulated products and services or they could become a target for scammers preying on moments of vulnerability.
“As a result, we’re doing even more to tackle false claims in adverts, issue prompt warnings to consumers, and we continue to engage with the largest tech and social media platforms as they also play an important part in protecting consumers from online harm. This is why changes to the Online Safety Bill to cover paid-for financial services advertising online are very much needed right now.”
Crackdown
This comes several weeks after the FCA said it had placed restrictions on twice as many firms in the investment market compared to last year.
It also stopped 17 firms and seven individuals attempting to obtain a new FCA authorisation in the investment market where phoenixing or lifeboating was suspected. This is where firms or individuals try to avoid the consequences of having provided unsuitable advice by moving to or setting up a new firm.
Elsewhere, IA published in March that the FCA was continuing to engage with social media platforms to stamp out the growing number of unregulated financial promotions being shared online.
Also, prior to the months of disarray, the UK government published a consultation which would reform online advertisement regulations under the Online Safety Bill. The proposals impose a legal duty on the “largest and most popular social media platforms and search engines” to prevent paid-for fraudulent averts from appearing on their services.
But the future of the Online Safety Bill is up in the air since the arrival of Liz Truss and Rishi Sunak as prime ministers.
