Rogue financial ads on the rise: FCA cracked down on 1,400% more than in the previous year

The UK Financial Conduct Authority (FCA) announced recently that it rejected 8,582 financial promotions last year. The rogue ads were not fitting for a display to the point where the regulator sought their amendment or removal by the companies that authorized them.

At this point, this represents a 1.400% increase over the 573 such promotions that the regulator reacted against in 2021. The FCA further disclosed figures in a statement this Friday, explaining that it had to publish over 1,800 scam alerts in 2022 in order to protect users against scammers.

The UK’s financial watchdog obtained more efficient tools

The regulator managed to increase the number of interventions against rogue financial ads after making significant improvements to the digital tools. It now uses the tools to fish out any company that might be considered problematic or offering misleading advertisements. As a result, the regulator managed to address a much larger number of cases than in the previous year.

The FCA underlined the so-called fin-fluencers, who became a growing source of concern. The regulator noted that it had to act against multiple such individuals throughout 2022. However, the FCA also said that it collaborated closely with a number of major tech companies in order to make them change their advertising policies, and ensure that they will only allow promotional materials that were previously approved by authorized firms.

On the other hand, the regulator also said that tech companies have to do more in order to protect their users.

FCA’s new ideas for improving ads control

Under this current regime, only authorized companies are allowed to approve financial ads on behalf of unauthorized companies. Meanwhile, in December 2022, the UK Parliament came up with a new policy that will require firms authorized by the FCA to undergo a new assessment in order to ensure that they approve ads appropriately.

So far, this is still just a proposal, and work is still ongoing on this, according to the FCA’s recent statement. The regulator added that it is consulting on introducing much tougher checks for companies undergoing the assessment. On the plus side, these measures will allow the regulator to put a stop to bad financial promotions by both companies and individuals that lack authorization to publish them.

Lastly, the regulator also noted that it might introduce Consumer Duty in mid-2023. This is not the first time that something like this has been proposed. In fact, the initial proposal came in May 2021, recommending consumer duties for financial companies. Initially, it wanted for it to kick off in July 2022, although now, it appears that it will not happen until July 2023.