Sergey Nivens - Fotolia
Last year saw a large increase in the number of financial product promotions the Financial Conduct Authority (FCA) forced finance firms to remove or amend.
A total of 8,582 promotions were pulled or changed after the FCA contacted firms promoting them, which was 14 times more than the previous year.
The UK finance regulator also sent out 1,800 alerts warning consumers of scams.
The FCA said part of the sudden increase in number of misleading promotions is its use of improved digital tools to identify scams and the firms behind them.
Sarah Pritchard, executive director of markets at the FCA, said financial promotions must be fair, clear and not misleading.
“Our expectations remain the same,” she said. “What has changed is the FCA’s approach. By drawing on better technology, we’re finding poor quality or misleading ads quicker. And where we find them, we’re stepping in to make firms improve them or remove them entirely.”
The FCA also said social media remains a major focus for the regulator’s work in combatting misleading promotions. “This year, we will continue to put the pressure on people using social media to illegally promote investments, which put people’s hard-earned money at risk,” said Pitchard.
Read more about the FCA
- UK financial services regulator wants technology professionals to join its team fighting online fraud.
- The Financial Conduct Authority is increasing the number of tech experts in its workforce through a new digital delivery centre in Leeds.
- The Financial Conduct Authority received 116 cyber incident reports in 2021, a fifth of them involving ransomware.
While it has worked with tech companies to prevent social media-based scams, the tech firms need to do more.
It has worked closely with big tech companies to change their advertising policies and ensure that only FCA-approved promotions are allowed, but the FCA added that “more needs to be done by tech companies to protect consumers”.
The FCA said it’s concerned that pressure on households, resulting from the cost-of-living crisis, will make people more “susceptible to scammers or adverts showing huge risk and unregulated products”.
The regulator is investing in technology and skills to support its efforts to monitor activity in the finance sector. In June 2022, as part of a “heavy” investment in data, it said it would hire people with expertise in artificial intelligence, analytics and data science, as well as cloud engineering and digital technology.
At the time, Jessica Rusu, chief data, information and intelligence officer at the FCA, said better use of data would allow it to be more proactive and find and stop harm faster. “We are continuing to improve our data, technology and capabilities to act decisively in consumers’ interests, while making it easier for firms to report to us,” she added.
In August, the FCA announced plans to recruit more than 100 people to work at a new digital delivery centre in Leeds and double the number of staff in its Edinburgh office to around 200 with more data and technology specialists.