The Financial Conduct Authority (FCA) has published its 2024 report on tackling misleading and harmful financial promotions. The report highlights actions taken against authorised any unauthorised firms and stresses the need for clear, fair, and transparent marketing to protect consumers in today’s complex financial services market.
Key Findings and Interventions
The FCA’s 2024 interventions demonstrated a strong commitment to raising industry standards and safeguarding consumers from financial harm:
Authorised Firms:
19,766 financial promotions were amended or withdrawn, a 97.5% increase from 10,008 in 2023.
The FCA required 18 firms to make voluntary changes and restricted 2 firms from approving or issuing financial promotions.
Unauthorised Firms:
2,240 alerts were issued to warn consumers about unauthorised, scam, or clone firms, remaining high despite a slight 2% decrease from 2023.
Cryptoasset Regulation:
The FCA introduced the Cryptoasset Financial Promotions Regime, shared good and bad practices to improve compliance, and took strong action against firms illegally promoting cryptoassets in the UK.
Technology-Driven Oversight:
Using advanced tools, the FCA reviewed 3,700 websites and social media platforms, issuing 1,600 alerts to warn consumers about unauthorised financial services being marketed online.
Targeting Finfluencers:
Twenty financial influencers (“finfluencers”) promoting financial products illegally were interviewed under caution, and 38 alerts were issued against unlawful social media accounts. The FCA urged platforms to do more to prevent illegal financial promotions.
Championing Consumer Duty
The FCA’s focus is on Consumer Duty, which requires firms to prioritise consumers, offer suitable products, and ensure fair value. The report flagged cases where firms gave unclear or misleading information, putting consumers at risk.
Vulnerable consumers were often the target of misleading promotions, particularly in claims management and debt advice services.
The FCA called on firms to address the specific needs of these consumers, ensuring their marketing aligns with the principles of fairness, clarity, and transparency.
Fostering Competition and Positive Change
Along with reducing harm and raising standards, the FCA encouraged competition and innovation. It introduced the Financial Promotions Approval Gateway to regulate firms approving promotions for unauthorised entities, ensuring accountability and transparency.
Looking Ahead
In 2024, the FCA used data and technology to address risks in the digital age. It urges firms to follow Consumer Duty guidelines and ensure positive outcomes for consumers. The FCA continues to monitor financial promotions, tackle non-compliance, and protect consumers from harm. Firms and social media platforms are encouraged to work with the FCA to improve standards and create a safer financial market.
For consumers, the FCA provides resources to report misleading advertisements and potential scams, empowering them to make informed financial decisions.