The UK’s Financial Conduct Authority (FCA) has launched a crackdown on social media influencers—dubbed “finfluencers”—who are promoting financial products illegally.
These influencers, popular across platforms like Instagram, YouTube, and TikTok, often flaunt glamorous lifestyles while pushing risky or even fraudulent financial schemes.
Now, the regulator is taking action, as concerns mount over the growing role of social media in financial fraud, particularly among young and vulnerable audiences.
The rise of finfluencers isn’t exactly surprising. As more people—especially younger generations—turn to social media for advice, traditional sources of financial guidance, like banks or financial advisors, have been left in the dust.
Statistics paint a stark picture: nearly two-thirds (62%) of 18- to 29-year-olds follow social media influencers, and among them, 74% say they trust the financial advice they see.
More worryingly, 90% of these young followers admit that they’ve changed their financial behavior based on what these influencers recommend.
But there’s a big problem here. The vast majority of these finfluencers aren’t qualified to give financial advice. They’re not authorized by the FCA, meaning they have no legal standing to promote investment products or services. Yet, to many of their followers, they appear credible.
As Steve Smart, the FCA’s joint executive director of enforcement and market oversight, put it: “Finfluencers are trusted by the people who follow them, often young and potentially vulnerable people attracted to the lifestyle they flaunt.”
The legal fallout
In response, the FCA has taken targeted action, interviewing 20 finfluencers under caution and issuing 38 alerts about potentially illegal financial promotions on social media.
Although the FCA hasn’t named the individuals under investigation, the regulator is keen to emphasize the seriousness of these offenses.
So far, the FCA has already charged nine individuals for promoting unauthorized foreign exchange (forex) trading schemes.
These influencers, some of whom have millions of followers, were found to be pushing highly risky investments like Contracts for Difference (CFDs)—a financial product so dangerous that 80% of people who invest in them lose money.
The FCA has long warned that CFDs are unsuitable for retail investors because they involve betting on price movements, and they’re often sold with high levels of leverage, meaning investors can lose more than they originally put in.
Social media’s role in fraud
What’s particularly concerning is how social media platforms themselves are enabling this problem. The FCA’s action against finfluencers is part of a broader push to hold platforms like Instagram and YouTube accountable for the financial harm caused by their users.
Revolut, one of Europe’s biggest fintech companies, has also recently called on Meta and other social media giants to share responsibility for fraud victim compensation. Revolut’s head of financial crime, Woody Malouf, pointed out that “social media platforms not only continue to enable fraud, but…the issue is just as bad today as it was last year.”
This comes in the wake of revelations that Revolut itself has been named in more fraud complaints than any other major UK bank—a clear sign that financial scams are becoming more sophisticated, often blending the allure of social media with risky financial schemes.
The Dangerous Appeal of Finfluencers
But why are people, particularly young people, falling for these scams in the first place? The answer lies in the psychology of social media.
Finfluencers tend to project an image of success—fast cars, luxury holidays, expensive watches—all of which can be highly attractive to younger audiences grappling with financial uncertainty, especially amid the current cost-of-living crisis.
The FCA began warning consumers back in 2022 to be wary of financial advice on social media, particularly around cryptocurrencies and forex trading.
These high-risk investments often promise quick returns, something especially tempting in hard times. However, as many have learned the hard way, the reality is often far less glamorous.
For example, Emmanuel Nwanze, one of the individuals recently charged, allegedly ran an unauthorized investment scheme via Instagram under the handle [@]holly_fxtrends.
He, along with several others, used Instagram to encourage followers to engage in forex trading, promoting risky CFDs without proper authorization. Some of the influencers involved in the scheme had millions of followers between them, amplifying the reach and impact of their promotions.
What’s Being Done?
The FCA isn’t stopping at just finfluencers. It’s also introduced new rules to limit how risky financial products like CFDs can be marketed to retail customers. These rules include stricter leverage limits and protections to ensure customers can’t lose more than the money they’ve invested.
Firms are also required to issue clear risk warnings about the dangers of these products. Since 2019, the FCA has restricted how CFDs can be sold and marketed, and they’ve been actively clamping down on misconduct in this area ever since.
The regulator is urging consumers to be extra cautious and always check the FCA’s warning list before investing.
The InvestSmart website, run by the FCA, offers practical advice to help people avoid being misled by unauthorized financial promotions.
The Takeaway
The message is clear: if you see an influencer promoting financial products or services on social media, think twice. Not only could they be breaking the law, but they could also be putting your financial future at risk.
While it might be tempting to follow someone who seems to have it all, it’s worth remembering that real financial success doesn’t happen overnight—and it certainly doesn’t come from taking unverified advice on Instagram or TikTok.
As Steve Smart of the FCA rightly pointed out, finfluencers must “check the products they promote to ensure they are not breaking the law and putting their followers’ livelihoods and life savings at risk.” And for the rest of us, the lesson is simple: when it comes to your money, trust the professionals—not the Instagrammers.