FCA cracks down on misleading ads but rapped for plans to name and shame

The FCA ramped up its crackdown on misleading financial promotions in 2024, forcing nearly 20,000 ads to be withdrawn or amended - almost double the 2023 figure.

Cryptoassets, debt solutions, and claims management companies (CMCs) topped the regulator’s hit list with 9,197 CMC promotions pulled, many targeting vulnerable consumers with motor finance and housing disrepair claims.

The FCA is pushing social media platforms to do more, having already taken aim at ‘finfluencers’- resulting in 20 interviews under caution.

Lucy Castledine, FCA’s director of consumer investments, said: "We’ve seen a surge in misleading and illegal financial promotions. Our response? Stepping up enforcement to ensure ads are clear, fair, and accurate.

"Firms must meet our standards, and we’ll keep working with platforms to stamp out illegal promotions."

More than 2,240 warnings were issued against unauthorised or suspected scam firms in 2024. The regulator said it has tightened rules requiring firms to get FCA approval before signing off on promotions for unauthorised parties.

Meanwhile, the House of Lords financial services regulation committee has raised the alarm over the FCA’s proposal to publicly disclose enforcement investigations more frequently.

In a report just published, it argues the FCA has failed to justify the change, warning that premature disclosures could wreck firms’ reputations before any wrongdoing is confirmed. This, they say, could destabilise markets and make the UK an outlier internationally - contradicting the FCA’s own goal of boosting competitiveness.

The committee believes much of the backlash could have been avoided if the FCA had consulted earlier. Now, they’re urging the regulator to address industry concerns before finalising the policy; withdraw the proposal if it can’t strike a balance between consumer protection and market stability; conduct a proper cost-benefit analysis, factoring in broader policy impacts and provide clear guidance on how the public interest framework will actually work.

Lord Forsyth of Drumlean slammed the FCA for failing to make a compelling case, highlighting that 65% of investigations lead to no action and warned that public naming could trigger unfair reputational damage, leading to panic-driven consumer moves and share price crashes—like the FCA’s 2014 Life Insurer Review.

The Association of British Insurers echoed these concerns, suggesting a compromise: if public disclosures must happen, omit company names and focus on industry-wide lessons instead.

The committee is also calling on the FCA to fix its own investigative process before making drastic policy shifts. Future consultations, they say, must be flagged earlier. In addition, they want the FCA to work with HM Treasury to ensure enforcement policies align with the UK’s financial stability and growth goals.