A significant crackdown on social media influencers promoting financial products unlawfully has escalated, with the City regulator unveiling that it is investigating 20 individuals under caution.

The Financial Conduct Authority (FCA) has escalated its efforts after filing charges against nine individuals in May over an unauthorized trading scheme endorsed by so-called financial influencers, often referred to as “finfluencers.”

In recent years, the FCA has expressed growing concern over the surge of influencers leveraging their social media influence on platforms like TikTok and Instagram to endorse various products and risky get-rich-quick schemes.

In July of the previous year, the authority warned that a “considerable number” of such promotions were illegal or non-compliant, highlighting that some influencers lack sufficient knowledge about the schemes they advertise. In March, the FCA issued new guidelines governing adverts that promote financial services on social media.

In its latest efforts, the FCA is undertaking “targeted action” to address the issue. In addition to interviewing 20 influencers voluntarily under caution, the regulator has also issued 38 warnings on its website regarding social media accounts associated with finfluencers that may be publishing illegal promotions.

Data from the FCA indicates that nearly two-thirds of individuals aged 18 to 29 actively follow social media influencers, with 75% of them expressing trust in the influencers’ recommendations. Furthermore, around 90% of young people reported being motivated to alter their financial behavior due to influencer guidance.

Steve Smart, the FCA’s joint executive director of enforcement and market oversight, stated: “Finfluencers hold significant trust among their followers, many of whom are young and potentially vulnerable, drawn in by the lavish lifestyles portrayed online.”

He added, “Finfluencers must verify the legitimacy of the products they promote to prevent legal violations and safeguard their followers’ financial well-being and long-term savings.”

In a notable example, celebrity Kim Kardashian faced a $1.26 million fine from the US Securities and Exchange Commission two years ago for failing to disclose that she was compensated $250,000 for promoting a cryptocurrency.

The FCA encourages individuals to consult its warning list before making any investment decisions.