Financial influencers and ‘get rich quick’ schemes

The Advertising Standards Agency (ASA) (Opens in new window) and the Financial Conduct Authority (FCA) (Opens in new window) have teamed up to crack down on financial influencers promoting 'get rich quick' schemes. This article explores how you can spot fraudulent financial products and hopefully find more trustworthy influencers.

The UK influencer industry is booming, with advertising spending expected to reach £1 billion by 2028; it has become a standard way for advertisers to reach an audience and is a staple of social media. Influencer accounts offer a way to discover new products and lifestyle hacks. Anything from gaming to makeup, or even fitness, can be the niche of an online celebrity. In recent years, especially post-pandemic, there has been a rising sector: finfluencers.

A wave of personal finance-focused content creators has become a go-to option for people to receive advice about money, saving and investing. Though some of these content creators may come from banking and finance backgrounds, they don't always have to have that credibility to share their advice.

In most cases, the advice is harmless and can help their target audience approach money in a way that the UK education system is too stretched to provide. Good influencers can make financial concepts more accessible and easier to understand. However, sometimes the content seeps into investment advice and promotes risky financial products.

Finance influencers and scams

Many finfluencers are reputable and helpful, but there are some scammers who flaunt flashy lifestyles and attribute this to foreign exchange trading schemes or cryptocurrencies they’ve invested in. Sometimes, they sell 'financial freedom' courses or workshops to their followers. Sometimes the finfluencers or influencers are not the scammers and are unaware they're promoting a scam – this is why you need to perform some due diligence.

This form of financial fraud, sometimes inadvertently promoted by trusted influencers, has been repeatedly called out. In 2021, £890 million was lost to investment fraud, and it has become another way for criminals to target victims on social media. Financial scams have evolved beyond anonymous phone calls about car accidents and unclaimed payment protection insurance (PPI); scammers are trawling social media looking for young or vulnerable users.

These schemes can lead to influencers exposing their followers to criminals and pushing people to invest in potentially risky products by creating a sense of urgency.

Regulating financial influencers

Recommendations from influencers have a significant impact on non-professional investors in the UK, with 31% of them making decisions based on the advice of content creators. Because of this, the FCA and ASA teamed up to educate financial influencers on how to avoid promoting 'get rich quick' schemes online.

Regulated financial brands, like Chase and Nutmeg, follow rules and guidance from the ASA and FCA to ensure they work with credible creators and review all information posted by influencers to check that it's accurate and fair.

How to spot and avoid scams

To help protect yourself from financial scams, keep these tips in mind:

• A hard-and-fast rule for all scams, influencers aside, is if a promotion is too good to be true, it often is. Big financial promises that lack detail prey on the vulnerable
• Never feel rushed into an investment; only fraudsters will put pressure on you to invest quickly
• Always do your research. Be sure to look into claims made on social media and check if the products are regulated. Believing big numbers and results without evidence could lead to being misled, as it's easy to fake graphs. Check on the FCA website (Opens in new window) to see if an investment business is authorised by the Financial Conduct Authority
• Be wary of influencers that overuse jargon, especially regarding cryptocurrencies and other high-risk investments Often, confusing information can be a way to appear more knowledgeable and trustworthy with audiences
• Though qualifications aren’t necessary to be a financial influencer, if someone is providing high-risk investment advice, you should check for relevant qualifications to make sure the source is trustworthy

Crypto assets are unregulated, and you should be prepared to lose all your money if it turns out to be a scam. As with all investing, your capital is at risk. If you think you might be the victim of a scam or fraud involving any of your Chase accounts, please contact us right away.

Recommended reading

• Money Fails: what did your most regrettable purchase teach you?
• Could these social media trends help you save money?
• Cryptocurrency scams are on the rise

Disclaimer: The Hub is intended as a knowledge portal to provide information on a range of topics, including financial products and lifestyle management. These articles are not financial advice. Articles may reference products and services that Chase UK does not currently offer. For full details on the products and services Chase and Nutmeg (Opens in new window) do offer, please refer to their websites.