FCA orders 2,235 financial promotions to be amended/withdrawn in Q1 2023
The UK Financial Conduct Authority (FCA) has published the latest quarterly financial promotions data.
The FCA interventions in the first quarter of 2023 resulted in 2,235 promotions being amended/withdrawn by authorised firms.
The regulator issued 611 alerts on unauthorised firms and individuals, with 12% of these about clone scams.
Given the rising cost of living the regulator did some work focused on unauthorised and authorised firms who offered debt advice which resulted in 9 alerts being issued, and it imposed voluntary requirements (VREQs) on 2 firms.
The FCA took action against a firm using a trading name which could potentially mislead consumers that the firm was a not-for-profit organisation or part of a government scheme. Firms should not use misleading trading names.
The regulator reviewed the marketing and promotion of Speculative Illiquid Securities (SIS), including mini-bonds where it found that some investments are being ‘rolled over’. Some investors were also being wrongly categorised as high net worth or sophisticated.
Retail investments and retail lending are the sectors with the highest amend/withdraw outcomes, totalling 90% of FCA’s interventions with authorised firms.
Some of the most common breaches involved credit brokers, lenders and firms promoting high-risk investments.
In the first quarter of 2023, the FCA received 6989 reports about potential unauthorised business.
The regulator issued 611 alerts about unauthorised firms and individuals, an increase of 15% from 531 in Q4 2022. 12% of these related to clone scams, which is where fraudsters use details such as the name and address of authorised firms and individuals, and a ‘firm registration number’ (FRN) to suggest they are genuine.
Many of these involved breaches of the financial promotion restriction online. In almost all cases the FCA asked for the websites to be taken down.
Let’s recall that the FCA required firms to amend or remove 8,582 promotions during 2022. The regulator also published over 1,800 alerts to help prevent consumers from losing their money to scams.