FCA and ASA Fin-influencer fanfare
Crypto Promotions under the Microscope with new Legislation.
19 April 2023
Another greenwashing culprit bites the dust.
3 May 2023
Financial freedom, retiring by 30 and earning hundreds of thousands through passive financial investments all sound like the dream. Amid a cost-of-living crisis and surging rent and bill costs, this fairy-tale-like dream seems ever more appealing. This has led to an increased number of people turning to ‘finfluencers’ for a quick finance fix. The FCA (Financial Conduct Authority) recently published their annual financial promotions report which recorded a whopping 8582 promotions that had to be amended or withdrawn in 2022 by the regulating body for being uncompliant, 14 times higher than that in 2021 (1). As a result, the FCA (Financial Conduct Authority) and the ASA (Advertising Standards Authority) are getting increasingly concerned about the misuse of social media by influencers to promote illegal “get rich quick” schemes to their followers.
In response the FCA and the ASA have partnered with Sharon Gaffka, a former Love Island contestant and current social media influencer, to help educate finfluencers about the risks of promoting financial products on social media.
Furthermore, the regulating bodies have said that they will be in contact with finfluencers and their agents to make it clear what classes an illegal financial promotion. The FCA has published an infographic which sets outs what finfluencers should check for before accepting brand deals for financial products and services (2). Some key takeaways from the checklist are:
- Are you providing advice about a financial product?
- Are you authorised by the FCA or has your post been approved by an FCA-authorised person? (Seek legal advice if unsure)
- Have you or your agent done your due diligence?
- Does your post follow the ASA rules? (Is it legal, truthful, responsible, and correctly labelled as an ad?)
- If you are promoting cryptocurrency, you must make it clear to your followers:
- Crypto is unregulated;
- Profits may be subject to tax; and
- Any investment value could fall.
- Do not suggest to your followers that crypto is an easy investment decision, do not create a sense of urgency or FOMO!
The FCA and ASA will monitor content and take action against influencers that are not following the rules. Keep these rules in mind when running financial promotions, and if in doubt don’t promote, or seek legal advice!