FCA Tightens Financial Promotion Rules, Withdraws Nearly 20,000 Ads in 2024

The UK Financial Conduct Authority (FCA) revealed in its latest report that 19,766 financial promotions were either modified or withdrawn in 2024, nearly double the 10,008 cases recorded in 2023.

FCA stated that one of its key regulatory focuses in 2024 was financial promotions in crypto assets, debt resolution, and Claims Management Companies (CMCs). Notably, 9,197 CMC-related promotions were removed due to misleading claims regarding housing repairs or car financing compensation.

Additionally, FCA imposed stricter regulations on the crypto asset industry. On October 8, 2023, FCA introduced a Crypto Asset Financial Promotions Regime, mandating that crypto firms obtain compliance approval before advertising financial products in the UK. Throughout 2024, FCA closely monitored compliance and took action against non-compliant promotions.

Increased Oversight on Social Media ‘Finfluencers’

Social media influencers, or “Finfluencers,” became a major focus for FCA. Data shows that nearly 62% of 18-29-year-olds follow financial influencers, with 74% trusting their recommendations. Due to concerns about misleading advice, FCA interviewed 20 Finfluencers and issued warnings against 38 social media accounts for suspected illegal financial promotions in 2024.

FCA also continued its collaboration with social media platforms, urging them to enhance monitoring and proactively block illegal financial promotions. However, some platforms, such as X and Discord, refused to remove non-compliant content. FCA has called for stronger measures from all platforms to prevent the spread of unlawful financial advertisements.

Stricter Financial Promotions Approval Regime Introduced

To enhance market transparency, FCA introduced the “Section 21 Gateway” on February 7, 2024, requiring firms seeking to approve financial promotions for unauthorized companies to obtain FCA authorization. This new rule aims to prevent unlicensed entities from issuing financial advertisements and ensures compliance with regulatory standards.

Additionally, FCA tightened oversight of financial institutions, requiring them to submit financial promotions compliance reports and ensure all approved promotions are transparent, fair, and non-misleading. In 2024, FCA reviewed 411 social media promotions from 21 firms, leading to the modification or removal of 1,633 advertisements.

Challenges Persist in Financial Advertising Compliance

Despite stricter enforcement, FCA found that many firms still engage in unclear, unfair, or even misleading financial promotions. Some companies use social media to promote financial products without adequately disclosing associated risks, leading consumers to misunderstand potential gains or losses. FCA stressed that it will continue to closely monitor financial promotions and impose stricter enforcement on non-compliant firms.

FCA plans to further tighten financial advertising regulations in 2025, with a focus on crypto assets, debt management, and high-risk financial products. Additionally, FCA is urging social media platforms to take greater responsibility in proactively blocking illegal advertisements, ensuring consumers are protected from misleading financial promotions.