Between 1 April 2024 and 30 June 2024, the Financial Conduct Authority (FCA) took action against firms breaching financial advertising rules and carried out investigations into unregulated activity.
During this period, 3,273 promotions of authorized firms were either changed or withdrawn. In addition, 528 warnings were issued regarding unauthorized firms and individuals, with 11% of these warnings relating to clone scams, where fraudsters use the details of legitimate firms to appear genuine.
FCA Performance: Key Figures
Following the completion of the Direct Offer Financial Promotion (DOFP) consent modifications implemented under the 23/6 policy statement, compliance audits were conducted. Feedback was provided to companies and enforcement actions were taken where violations were identified.
A total of 943 financial actions were reviewed during this period. Of these, 69% were identified through proactive monitoring, 11% through consumer complaints, 10% through firm submissions, 6% from UK regulators and 4% from other areas of the FCA. The retail investment and retail lending sectors had the highest levels of amendments and withdrawals, accounting for 89% of all interventions on authorised firms.
Regarding unauthorized firms, 5,544 potential violation reports were received. Of these, 528 warnings were issued, 11% of which were related to clone scams. These scams often involved violations of restrictions on online financial promotion, and steps were taken to remove the offending websites.
FCA monitors cryptocurrency promotions
For crypto-asset companies, the Direct Offer of Financial Advertising (DOFP) rules, which came into force on 8 January 2024, require personalised risk warnings, a 24-hour cooling-off period, and customer categorisation and compliance assessments. Compliance reviews against these rules have resulted in feedback for companies and actions where breaches are detected. Good and bad practice findings have also been published to improve sector standards.
Registered cryptocurrency firms using “widget” models to provide services via APIs have been audited for compliance. Concerns have been raised about illegal actions by partner firms.
Firms were advised to ensure they understood and complied with the UK Financial Advertising Rules, to conduct thorough due diligence and ongoing monitoring of partner firms and to avoid suggesting that partners did not need to comply with the rules. Action was expected to be taken to address risks if partners were found to be in breach of the rules.
