Holmes Mackillop cautions investors against finfluencer online scams
Following action by the Financial Conduct Authority (FCA) on ‘finfluencers’ suspected of touting financial services products illegally, Holmes Mackillop has cautioned investors against falling victim to online scams and urged them to only take financial advice from an FCA-approved financial services adviser.
With increasing numbers of young people, often influenced by finfluencers – celebrities using social media platforms to promote financial products – falling victim to scams, 20 individuals are being interviewed under caution and the FCA has issued 38 alerts against social media accounts operated by finfluencers.
According to the FCA, half of all investors aged 18 to 24 use social media to either research investment, find new opportunities or get updates on existing investments.
Nearly two-thirds of 18- to 29-year-olds follow social media influencers, 74% of those said they trusted their advice and nine in 10 young followers have been encouraged to change their financial behaviour.
The FCA has focused on finfluencers touting foreign exchange and contracts for difference (CFD) trading, a high-risk investment product used to bet on the price of an asset but is concerned that finfluencers are promoting on an unlawful basis in other areas, such as credit lending and debt solutions.
Holmes Mackillop director Ralph Riddiough said: “While there is reassurance to be found in the fact that the FCA has shown its resolve to act against those who promote financial products or services without appropriate permissions, I would strongly urge investors to only take financial advice from an FCA-approved financial services adviser to avoid placing their livelihoods and life savings at risk.”
The Financial Conduct Authority has interviewed 20 finfluencers voluntarily using its criminal powers. Potential penalties include fines and imprisonment of up to two years.
Riddiough recommends any investor who suspects they have fallen victim to an online scam to seek legal advice.
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For further information please contact on Ralph Riddiough on tel 0141 226 4942
