In 2024, the UK financial regulator reported significant action against misleading financial promotions, revealing that nearly 20,000 advertisements were either amended or withdrawn, marking a substantial increase from the previous year. This figure represents a nearly 97.5% rise in the number of problematic promotions addressed compared to 2023, showcasing a heightened regulatory focus on consumer protection.
The regulatory body particularly scrutinized promotions associated with cryptoassets, debt solutions, and claims management companies (CMCs). Notably, a substantial portion of these interventions, with approximately 9,197 promotions, involved CMCs. Many of these promotions related to housing disrepair claims and motor finance issues that often targeted vulnerable consumers. The proactive measures led to withdrawals from 46 authorized CMC firms.
The regulator has been increasingly vocal about its concerns regarding social media platforms and their roles in perpetuating illegal financial promotions. Following targeted actions against social media influencers, referred to as “finfluencers,” twenty individuals faced formal interviews, indicating a broader crackdown on misleading content disseminated through social media.
The regulatory body expressed the need for clear and accurate financial promotions to protect consumers. It has ramped up its efforts to ensure that financial advertisements meet established standards. To this end, new rules have been implemented, including the Section 21 Gateway. This particular regulation mandates that firms must secure permission from the regulator before they can approve promotions for those not authorized to do so.
In addition to the promotional removals, the regulator issued 2,240 warnings regarding unauthorized or potentially fraudulent firms throughout 2024. Consumers have been encouraged to report scams and suspicious activities directly to the regulator to foster a safer financial environment.
The increase in regulatory actions reflects ongoing efforts to enhance the transparency and safety of financial promotions within the market. The regulator’s commitment continues to center around collaboration with various entities, including social media platforms, to tackle the challenges posed by misleading advertisements effectively. The overarching goal is to establish a financial market where promotions are not just abundant but also truthful and fair to the consumers they serve.