FCA has published a second supervisory notice to confirm that it is not rescinding the directions imposed on Freetrade Limited in its first supervisory notice dated 14 December 2021. Freetrade must therefore immediately remove all paid-for sponsored influencer advertisements and posts across all social media platforms, including Instagram, TikTok, Facebook and YouTube, and confirm to the FCA that it has done so.
As a reminder, in its first supervisory notice, FCA found that Freetrade had breached COBS 4.2.1R (the “fair, clear and not misleading” rule) by failing to consider the extent to which vulnerable customers might access a financial promotion it had approved to be made by a social media influencer, in order to promote its services of commission-free investments.
- that the promotions provided consumers with the impression that they could reduce debt by following the steps taken by the influencer and use the firm as a mechanism to make money;
- this was misleading as there were no guarantees that any investment would result in positive gains in the short or long term; and
- consumers already in debt were likely to be particularly vulnerable to this.