FCA reviews 451 financial promotions in Q2 2022
The UK Financial Conduct Authority (FCA) reviewed 451 financial promotions in the second quarter of 2022. Its engagement resulted in 374 amends/withdrawals.
Retail investments and retail lending are the sectors with the highest amend/withdraw outcomes, amounting to 83% of FCA interventions with authorised firms. Some of the most common breaches involved credit brokers, mortgage intermediaries and investment platforms.
In Q2 2022, the regulator received 6,010 reports about potential unauthorised business. It issued 286 alerts about unauthorised firms and individuals. Just over 22% of these were about clone scams. 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.
Over the last quarter, the FCA continued to see a considerable number of cases involving unauthorised firms and individuals who are offering claims management services, often requiring a substantial upfront fee, or regular administration payments for the promise of recovering funds on behalf of consumers.
Other ongoing trends include increased use of bloggers and influencers on social media, such as Instagram, Facebook and YouTube, to target younger age groups. The aim is to persuade them to invest in products with promises of high or guaranteed returns but which offer no protection if things should go wrong.
Where the FCA identifies illegal content, it will issue an alert where appropriate and request for the content to be removed. In the most serious cases where there is evidence of consumer harm, this may result in parties engaged in this activity being required to pay restitution or face criminal sanctions.
Given the role played by social media and online platforms, and following the steps taken by Google, the FCA continues to engage with the largest online platforms, including Meta, YouTube and Twitter, to put in place similar policies. The regulator expects commitments from Meta to implement a mandatory solution this year.
In 2021, the FCA reviewed 1,686 financial promotions. Last year, 34,244 reports were received about potential unauthorised business.