The FCA mandated as of February 7, 2024, that authorized firms must obtain permission to approve financial promotions for unregulated entities.
In 2023, the Financial Conduct Authority (FCA) took significant action against misleading financial advertisements and promotions, resulting in over 10,000 of them being withdrawn or modified, marking a 17% increase compared to the previous year, the UK regulator announced.
This crackdown was part of the FCA’s broader efforts to protect consumers, evidenced by the issuance of 2,285 alerts to ward off potential scams, a notable rise from 1,800 alerts in 2022.
A significant focus for the FCA, empowered by new governmental authorities, has been on combating illegal cryptoasset promotions targeting UK consumers, with 450 consumer alerts specifically concerning this issue being issued in Q4 2023 alone. The FCA’s actions reflect growing concerns over financial product promotions on social media, especially those endorsed by influencers targeting younger demographics.
Permission to approve financial promotions for unregulated entities
Further tightening its grip, the FCA mandated as of February 7, 2024, that authorized firms must obtain permission to approve financial promotions for unregulated entities. This requirement aims to ensure that firms endorsing financial promotions possess the necessary competence and expertise.
The introduction of the Consumer Duty in July 2023 underlines these efforts, mandating firms to offer information that supports consumers in making knowledgeable choices regarding financial products and services. This series of measures illustrates the FCA’s dedication to safeguarding consumers and maintaining the integrity of the financial market.
Lucy Castledine, Director of Consumer Investments at the FCA, said: “People need clear, fair and accurate information to base their financial decisions on. We will continue to intervene and take action when we identify firms not meeting our minimum standards.”
