FCA Taps Love Island Contestant to Educate Finfluencers

Thursday, 06/04/2023 | 10:17 GMT by Arnab Shome
  • The FCA and ASA jointly kicked off the education campaign.
  • Sharon Gaffka will help the agencies in the campaign.
Financial Conduct Authority (FCA) logo on a building in the United Kingdom
Bloomberg

Two regulatory bodies in the United Kingdom, the Financial Conduct Authority (FCA) and the Advertising Standards Authority (ASA), have launched a campaign to educate financial influencers primarily to stop them from promoting illegal 'get rich quick' schemes. The agencies also partnered with Sharon Gaffka, a prominent social media influencer in the country.

Regulators Educating Finfluencers

The two regulators' campaign will involve engaging with influencers and their agents and providing them with information on identifying illegal financial schemes. The FCA, which regulates the UK financial services market, will invite influencer agents and the Influencer Marketing Trade Body to an open roundtable discussion on illegal financial promotion.

"We've seen more cases of influencers touting products that they shouldn't be. They are often doing this without knowledge of the rules and without understanding of the harm they could cause their followers," said Sarah Pritchard, the FCA's Executive Director for Markets.

"We want to work with influencers so they keep on the right side of the law, as this will also help protect people from being shown scams or investments that are too risky."

Partnering with a Social Media Influencer

Gaffka participated in a popular British reality TV show and is a social media personality with more than 353,000 followers on Instagram. Though the agencies announced the partnership with Gaffka, her role in the campaign is not known. However, they might be tapping her experience to learn more about social media marketing and how influencers are approached.

"When you leave a show like Love Island, you are bombarded with opportunities to promote products and work with brands, if like me, you're new to this kind of work; it can be a little bit overwhelming," said Gaffka.

"This campaign with the FCA and ASA will hopefully make sure other influencers stay on the right side of the law and prevent them from unknowingly introducing their followers to scams or high-risk investments."

Regulators against Illegal Financial Scheme Promotion

Financial influencers o finfluencers make a massive impact on investing habits of retail investors. According to a CySEC study, 31 percent of retail investors in the country invested based on recommendations by these finfluencers.

Both the FCA and ASA are struggling to fight the rising promotion of fake financial products. Last year, the intervention of the FCA led to the withdrawal or amendment of 8,582 promotions of financial products, which is 14 times higher than the previous year.

However, the UK regulators are not alone in the fight against financial scams pumped by the so-called influencers. Australian financial market supervisor issued multiple warnings against the activities of influencers including Tyson Scholz, a 'finfluencer' famous for the name ASX Wolf, for breaching financial market laws.

In addition, the agencies in the United States fined millions of dollars on sports and entertainment celebrities, like Floyd Mayweather, DJ Khalid, and Kim Kardashian, for promoting fraudulent cryptocurrency schemes. A recent lawsuit by SEC, also named eight American celebrities for promoting TRX and/or BTT without disclosing details of their payments.

"We've worked hard to ensure that influencers are equipped with the training and advice they need to help them advertise responsibly. From setting up a dedicated webpage to highlight those who are publishing misleading content, to using cutting-edge data science to process more ads than ever, we're seeing influencers increasingly understanding and following the rules," said Miles Lockwood, the Director of Complaints and Investigations at the FCA.

FCA checklist for finfluencers
Checklist for finfluencers

Two regulatory bodies in the United Kingdom, the Financial Conduct Authority (FCA) and the Advertising Standards Authority (ASA), have launched a campaign to educate financial influencers primarily to stop them from promoting illegal 'get rich quick' schemes. The agencies also partnered with Sharon Gaffka, a prominent social media influencer in the country.

Regulators Educating Finfluencers

The two regulators' campaign will involve engaging with influencers and their agents and providing them with information on identifying illegal financial schemes. The FCA, which regulates the UK financial services market, will invite influencer agents and the Influencer Marketing Trade Body to an open roundtable discussion on illegal financial promotion.

"We've seen more cases of influencers touting products that they shouldn't be. They are often doing this without knowledge of the rules and without understanding of the harm they could cause their followers," said Sarah Pritchard, the FCA's Executive Director for Markets.

"We want to work with influencers so they keep on the right side of the law, as this will also help protect people from being shown scams or investments that are too risky."

Partnering with a Social Media Influencer

Gaffka participated in a popular British reality TV show and is a social media personality with more than 353,000 followers on Instagram. Though the agencies announced the partnership with Gaffka, her role in the campaign is not known. However, they might be tapping her experience to learn more about social media marketing and how influencers are approached.

"When you leave a show like Love Island, you are bombarded with opportunities to promote products and work with brands, if like me, you're new to this kind of work; it can be a little bit overwhelming," said Gaffka.

"This campaign with the FCA and ASA will hopefully make sure other influencers stay on the right side of the law and prevent them from unknowingly introducing their followers to scams or high-risk investments."

Regulators against Illegal Financial Scheme Promotion

Financial influencers o finfluencers make a massive impact on investing habits of retail investors. According to a CySEC study, 31 percent of retail investors in the country invested based on recommendations by these finfluencers.

Both the FCA and ASA are struggling to fight the rising promotion of fake financial products. Last year, the intervention of the FCA led to the withdrawal or amendment of 8,582 promotions of financial products, which is 14 times higher than the previous year.

However, the UK regulators are not alone in the fight against financial scams pumped by the so-called influencers. Australian financial market supervisor issued multiple warnings against the activities of influencers including Tyson Scholz, a 'finfluencer' famous for the name ASX Wolf, for breaching financial market laws.

In addition, the agencies in the United States fined millions of dollars on sports and entertainment celebrities, like Floyd Mayweather, DJ Khalid, and Kim Kardashian, for promoting fraudulent cryptocurrency schemes. A recent lawsuit by SEC, also named eight American celebrities for promoting TRX and/or BTT without disclosing details of their payments.

"We've worked hard to ensure that influencers are equipped with the training and advice they need to help them advertise responsibly. From setting up a dedicated webpage to highlight those who are publishing misleading content, to using cutting-edge data science to process more ads than ever, we're seeing influencers increasingly understanding and following the rules," said Miles Lockwood, the Director of Complaints and Investigations at the FCA.

FCA checklist for finfluencers
Checklist for finfluencers
About the Author: Arnab Shome
Arnab Shome
  • 6368 Articles
  • 80 Followers
About the Author: Arnab Shome
Arnab is an electronics engineer-turned-financial editor. He entered the industry covering the cryptocurrency market for Finance Magnates and later expanded his reach to forex as well. He is passionate about the changing regulatory landscape on financial markets and keenly follows the disruptions in the industry with new-age technologies.
  • 6368 Articles
  • 80 Followers

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