FCA orders investment app to remove posts on social media

UK data regulator the Financial Conduct Authority (FCA) has ordered the investment application known as Freetrade to delete some of its posts on social media that promoted a personal finance influencer.

The UK watchdog recently published a ruling that instructed the app to remove a series of paid-for posts on all of the social media platforms it uses, giving it a 24-hour period to comply. The app deleted the posts, but the ban regarding using influencers to promote remains in position.

The FCA found cause to intervene after two posts were made, initiated by an unnamed personal finance influencer with a following of more than 64,000 on the social media platform TikTok. The influencer was sponsored by the app and published videos that promoted it. One of the videos broke the FCA’s rules by not adding a warning about capital at risk. UK consumers concerned about investment risk often seek financial advice in Chester, Manchester and other cities.

The second video included the warning, but broke other FCA rules when the influencer commented on reducing personal debt broadly within her content. The regulator stated that the video could mislead investors into thinking that the app might help them clear debts of their own and made the content attractive to indebted customers. The FCA commented:

“Communications through social media platforms can reach a wide audience very rapidly and risk being accessed by vulnerable customers.”

News of the ruling comes as the FCA attempts to tackle investment products being promoted online, especially to young and inexperienced investors.

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