Britain’s financial watchdog on Tuesday proposed tougher rules for approving financial promotions after a sharp rise in misleading marketing online.
Currently, marketing information can be approved by a firm regulated by the Financial Conduct Authority (FCA) without its direct nod.
But under the new measures, which are part of a draft financial services and markets bill before the parliament, firms approving the promotions will have to show they have the right expertise.
Sarah Pritchard, FCA executive director for markets, said social media and online advertising means consumers are taking less time between seeing a promotion and making a financial decision.
“It is, therefore, essential that they are equipped with the right information at the right time so that they can make good financial decisions. This is especially important as we face the rising cost of living,” Pritchard said.
Firms will also be required to regularly report back to the FCA on the financial promotions they have approved, helping the agency crack down on rogue adverts.
The FCA said firms who give their approval to marketing literature published by non-regulated companies will face tougher checks.
“The proposed reforms will ensure the FCA can act quickly to put a stop to harmful financial promotions communicated by unauthorised firms, including in areas such as high-risk investments and Buy Now Pay Later,” the watchdog said.