Financial promotions quarterly data 2022 Q4

The data we gather means we can monitor developments in the market, get insights into 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• number of closed cases where promotions have been amended and withdrawn, including split across sectors, excluding cases which are still ongoing  
• number of unauthorised reports received, and alerts issued
• how we act

Key messages 

• In 2022 Q4, we reviewed 870 promotions.
• Our intervention resulted in 3,973 amends/withdrawals.
• Retail lending (with 53%), retail investments and general insurance & protection are the sectors with the highest amend/withdraw outcomes, amounting to just over 80% of our interventions with authorised firms.
• Some of the most common breaches involved credit brokers, life insurance providers and various investment providers.
• In 2022 Q4, we issued 531 alerts about unauthorised firms and individuals, with 10% of these related to clone scams.
• We also supported the Early and High Growth Oversight Department by providing a webinar training session to around 500 attendees, to remind firms of our financial promotion’s rules.

Authorised firms

Number of promotions reviewed 

In 2022 Q4 we reviewed 870 financial promotions from multiple sources.

Table 1: Number of cases with interventions and amend/withdraw outcomes

Figure 1 shows the split across sectors.

Figures rounded to the nearest percentage.

Our expectations 

We expect authorised firms issuing and/or approving financial promotions to take responsibility in making sure all communications of financial promotions are clear, fair, and not misleading and comply with our relevant rules.

This can also include oversight of appointed representatives, or introducer appointed representatives, and marketing across all media platforms such as websites, paid for Google ads and social media sites.

We will continue to intervene swiftly and assertively against authorised firms that make non-compliant financial promotions.

Example interventions 

To show how we bring these principles to life, we set out how we intervened in 8 cases.  

Unauthorised firms

Number of reports received  

In 2022 Q4, we received 6,374 reports about potential unauthorised business.  

We issued 531 alerts about unauthorised firms and individuals. Just under 10% of these were about clone scams. This is where fraudsters often use details such as the name and address of authorised firms and individuals, and a 'firm registration number' (FRN) to suggest they are genuine. Many of these involved breaches of the financial promotion restriction online. In almost all cases we asked for the websites to be taken down.

Scammers continue to target consumers searching for investments online, through social media such as Instagram, YouTube or Tik Tok.

Fin-fluencers

We have continued to see a trend in unauthorised social media influencers and bloggers making illegal promotions which seek to persuade consumers to invest in high risk, volatile products which are inappropriate for the consumer being targeted. Products and services being offered vary but examples we have identified included:

• promotions of loans or some form of credit to students struggling with their finances
• posts about get quick rich FX trading schemes
• videos providing either trading signals or copy trading information to entice consumers to sign up to a trading package being offered by the blogger

In the cases where we identified an unlawful promotion, we published a consumer alert and requested the social media platform hosting the harmful content to remove it. We are working closely with other regulators to educate fin-fluencers about their obligations when seeking to promote financial products or services. We want to remind fin-fluencers that when advertising to consumers through their social media channels they could be breaching the Financial Services and Markets Act 2000 (FSMA) by issuing illegal financial promotions which entice consumers to invest money they cannot afford to lose and to think carefully before endorsing or promoting financial products. 

We are increasing our efforts to hold social media companies to account for illegal content identified on their platforms. We have increased our capability to search across social media to identify illegal financial promotions faster and in larger volume. When we find this content, we provide this information to the relevant platform with the clear expectation that they:

1. remove it
2. improve their own controls to stop such content being promoted to their customers in the future

Targeting of UK consumers with high-risk products

We have continued to take swift action to stop unauthorised promotions which are commonly issued outside the UK, but which seek to target UK retail consumers with a variety of high-risk products. Many of these promotions are scams but a consistent theme in the promotions that we have acted against are that they downplay or make no reference to the substantial risks involved in the investments being promoted. The promotions are typically made in websites, but we have also received several reports of consumers being targeted through emails sent to their personal emails. The most common products/services featuring in these promotions have been FX, CFDs, futures and, to a lesser extent, binary options. These are often promoted alongside other products that fall outside the FCA’s remit, in particular crypto assets and NFTs. For example, over 320 of the alerts issued in the last quarter included a promotion about FX or CFDs and over 220 promotions appeared on sites which also promoted investments in crypto assets.  

Unauthorised collective investment schemes (UCIS)

We have seen a slight increase in the number of UCIS being promoted to UK consumers. UCIS are high-risk investments and cannot be promoted to the general public in the UK. Recent cases reported to us have involved investments in hotel rooms and investments in nursing homes. These investments are often promoted on the basis that they are more secure because they involve investing in a physical property (such as a hotel, student accommodation or a retirement home). However, UCIS are sometimes scams and they often have a high risk of failure especially where the property investment being promoted has yet to be built or has only recently been established. We currently have 6 open enquiries into suspected UCIS. Where appropriate, in addition to stopping further illegal promotions, the schemes may need to be restructured or unwound altogether so that remaining sums can be repaid to consumers. 

How we act  

For authorised firms, we use a range of tools. These include the imposition of voluntary requirements (VREQs) or using our powers to impose own initiative requirements. The firm which has communicated or approved the advert is requested to withdraw or change it to comply with our requirements. In the most serious circumstances, we will use our powers under s137S of 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 for 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.

We conduct proactive daily monitoring to identify websites containing illegal promotions and take prompt action by publishing an alert on our website, typically within 24 hours, requesting that the offending website is taken down. 

We are continuing to develop our capability to identify more quickly, alert and request social media platforms take down unauthorised financial promotions. We are engaging with social media firms, to identify, stop and remove illegal financial promotions on their platforms.

For firms and individuals identified as potentially acting outside of our perimeter, we have a range of tools including enquiries, challenging firms and individuals' activities via technical correspondence and publishing consumer alerts on our website. We escalate the most serious problems to our Unauthorised Business Department's investigation teams, who can use powers under FSMA to commence civil, criminal and/or insolvency proceedings.

How to report a misleading financial advert or potential scam

Report a financial advert or promotion that you think is misleading, unfair or unclear.

Report a scam, 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.

Copyright

The data on this page is available under the terms of the Open Government Licence.