This page analyses the latest data, from January 2021 to 31 December 2021, resulting from action taken against authorised firms breaching financial promotion rules and referrals and investigations into unregulated activity.
In line with our Consumer Investments Strategy[1], publishing this data allows us to be transparent about the outcomes we’re seeking to achieve with our financial promotions interventions and the results of our work. The strategy sets out the steps that we are taking to be more innovative, assertive and adaptive in tackling harm. This includes strengthening the financial promotions regime[2]. However, it should be noted that this data relates to financial promotions across all sectors, not just consumer investments.
The data also means we can monitor developments in the market, to get insights into particular sectors we have concerns about and act to prevent consumers from harm.
What’s included in the data
- key messages for regulated and unregulated financial promotion activity
- number of financial promotions reviewed during this period
- number of cases with promotions amended and withdrawn including split across sectors, this relates to closed cases and excludes cases which are still ongoing
- number of unauthorised reports received and alerts issued
- how we act
Key messages
- In relation to authorised firms, last year saw an increase in approx. 300 amends/withdrawals of promotions, compared to around the same number of cases as 2020:
- retail investments and retail lending are the sectors with the highest amend/withdraw outcomes, amounting to 77% of our interventions with authorised firms
- some of the most common breaches were in the Retail Lending sector, in particular Claims Management Companies’ and Retail Finance promotions
- retail investments’ use of social media influencers on various platforms to market investments is becoming a concern for us. Firms should ensure they have taken appropriate legal advice to understand their responsibilities prior to using influencers.
- In relation to illegal financial promotions by unauthorised persons, last year saw an overall increase of 10% of total reports received compared with 2020:
- we issued 1410 alerts about unauthorised firms and individuals in 2021, an increase of 18% from 2020, with 30% of these related to clone scams
- we have seen a significant reduction in non-compliant paid for advertisements by unauthorised entities on Google since our engagement and the implementation of their new financial services ad policy
Authorised firms
Number of promotions reviewed
In 2021 1,686 financial promotions from multiple sources were reviewed.
46% from consumers
25% from different areas of the FCA
16% from UK Regulators
6% from firms
5% from our monitoring
Table 1: Number of cases with promotions amended and withdrawn including split across sectors
|
2020 |
2021 |
|---|---|
| 1 s137S (the Banning Power) directing a firm to withdraw financial promotions | 0 s137S (the Banning Power) directing a firm to withdraw financial promotions |
|
0 Own Initiative Application for Imposition of Requirements (OIREQs) being imposed restricting the firm’s ability to communicate or approve financial promotions
|
1 Own Initiative Application for Imposition of Requirements (OIREQs) being imposed restricting the firm’s ability to communicate or approve financial promotions
|
|
4 Voluntary Applications for Imposition of Requirements (VREQs) were approved, restricting the firm’s ability to communicate or approve financial promotions
|
8 Voluntary Applications for Imposition of Requirements (VREQs) were approved, restricting the firm’s ability to communicate or approve financial promotions
|
|
207 promotions being amended or withdrawn following our intervention with 131 authorised firms
|
564 promotions being amended or withdrawn following our intervention with 132 authorised firms
|
|
87% of these involved website or social media promotions |
77% of these involved website or social media promotions
|
Figure 1 shows how the cases in 2021 which resulted in firms withdrawing or amending a promotion are spread across different sectors.
Chart
Data table
Figures rounded to the nearest percentage.
Unauthorised firms
Number of reports received
In 2021, 34,244 reports were received about potential unauthorised business.
The number of alerts issued about unauthorised firms and individuals totalled 1,410, an increase of 18% from 2020. Just under 30% of these alerts related to clone scams. Many of these involved breaches of the financial promotion restriction online. In exceptional cases, we request that any linked websites and/or social media accounts identified as carrying illegal content are taken down.
Whilst we have seen a significant reduction in non-compliant paid for advertisements by unauthorised entities on Google since our engagement and the implementation of their new financial services ad policy, we are continuing engagement with other social media platforms and continuing to monitor the online market carefully and update our Warning List as appropriate.
How we act
For authorised firms, we use a range of tools available, including agreeing to voluntary or imposing own initiative requirements, requiring the firm which has communicated or approved the advert to withdraw it or change it so that it complies with our requirements. In the most serious circumstances, we will use our powers under s137S FSMA to ban a promotion or advert. Where we see repeated non-compliance with our rules, we expect these firms to conduct more detailed reviews and provide reports on these findings, particularly on their systems and controls in relation to their financial promotions. We may also ask firms to consider whether any customers may have acted on the non-compliant promotions and to take appropriate action to remedy any harm which consumers may have suffered as a result.
For firms acting outside of regulation, we have a range of tools to take proportionate enforcement action including; inquiries, including challenging firms and individuals' activities via technical correspondence or publishing consumer alerts, and escalating the most egregious matters to the Unauthorised Business Department's investigation teams for investigation using powers under FSMA, with a view to commencing civil, criminal and/or insolvency proceedings.
How to report a misleading financial advert or potential scam
Report a financial advert or promotion[3] that you think is misleading, unfair or unclear.
Report a scam[4], authorised firm or individual to us.
Our casework with will usually involve confidential information for the purposes of section 348 of the Financial Services and Markets Act 2000. We are therefore unlikely to be able to provide further information about particular cases. Find out more about the information we can share[5].