The Australian Securities and Investments Commission (ASIC) has warned unlicensed social media personalities to stop illegally promoting financial products or giving financial advice.
Australia’s corporate regulator has joined a global crackdown by issuing warning notices to 18 social media "finfluencers" suspected of unlawfully promoting high-risk financial products and providing unlicensed financial advice to Australians.
ASIC and eight regulators from the United Kingdom, United Arab Emirates, Italy, Hong Kong and Canada last week took coordinated action as part of the Global Week of Action Against Unlawful Finfluencers.
They used a combination of arrests, warning notices, website takedowns, educational schemes with authorised finfluencers and consumer awareness programs to put unauthorised promoters on notice and warn consumers of the risks they pose.
“It’s important that consumers separate fun from fact when it comes to finfluencer content,” ASIC Commissioner Alan Kirkland said in a media release.
“Popularity doesn't equal credibility. Check their credentials and whether they’re licensed or authorised, before checking your money out.”
ASIC is worried about finfluencers positioning themselves as trading experts, providing unauthorised financial product advice and promoting high-risk, complex investment products that can cause consumer harm, such as contracts for difference (CFDs) and over the counter (OTC) derivative products.
Their social media content is often accompanied by misleading or deceptive representations about the prospects of success from the products or trading strategies they promote, sharing images of lavish lifestyles, sports cars and other luxury goods.
Since it issued INFO Sheet 269 Discussing financial products and services online in 2022 ASIC had noticed a drop in posts spruiking financial products and services as unauthorised finfluencers changed what they were saying or became licensed or authorised representatives to comply with the law.
Australian Financial Services licensees who engaged influencers also improved their due diligence and monitoring of finfluencers to ensure they did not provide unlicensed financial services and that consumers were not misled.
ASIC did not identify the Australians it targeted.
