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The UK financial watchdog is calling on Big Tech groups to do more to stop the “whack-a-mole” problem of people switching between social media accounts to keep promoting unauthorised financial schemes or businesses.
Many “finfluencers” continued to operate even after the Financial Conduct Authority requested that their social media account be closed down by simply switching to a different one, the regulator told MPs on Wednesday.
“We can’t have that content popping up 12 hours later,” Lucy Castledine, director of consumer investments at the FCA, told the House of Commons Treasury select committee. “That is the big call to action.”
“At the moment we have to submit individual account takedowns,” said Castledine. “The Big Tech platforms have got the technology to identify this; they need to be proactive about it otherwise we will be in a continued whack-a-mole.”
Last year, the FCA received 25,000 reports of unauthorised businesses, she said.
The FCA has been trying to crack down on finfluencers, social media influencers who promote financial schemes or trading strategies without authorisation, after publishing guidance on such promotions and starting to prosecute people who broke its rules last year.
The watchdog charged nine people in 2024 — including former stars of reality television shows Love Island and The Only Way is Essex — with promoting an unauthorised financial trading scheme to their combined 4.5mn followers. The nine cases are not due to come to court until 2027.
After showing MPs a video of a social media promotion by an unlawful finfluencer featuring luxury cars and houses, Castledine said the regulator was in talks with the government about legislation to introduce tougher prison sentences for people who break the law in this area.
Castledine said the regulator aimed to increase the maximum prison sentence from two years to five years for the crime of communicating unauthorised financial promotions under the Financial Services and Markets Act 2000.
“Fundamentally this content is illegal,” she said. “It is driving people into parting with their money. It is very much a recurring theme we are seeing and it is a growing trend. We need people to sit up and take action.”
She said people did not have to be followers of finfluencers to be shown their promotions as the algorithms of social media sites will often push their content to them based on their viewing history.
Steve Smart, joint executive director for enforcement and market oversight at the FCA, told MPs there had been “a number of instances where what is being promoted turns out to be fraud or a scam where people will lose a significant proportion if not all of their money”.
The two main types of finfluencers were fraudsters and people offering unauthorised financial advice, such as those recommending others follow their trading strategies, he said.
Dame Meg Hillier, the Labour MP who chairs the committee, said it was “jaw-dropping” that no finfluencers had yet been convicted. “It sounds like there’s an awful lot of work to do and I think these online platforms clearly have a responsibility here too.”
