The Financial Conduct Authority (FCA) has interviewed 20 “finfluencers” under caution as it takes action against people who may be illegally promoting financial services.

The regulator has also issued 38 alerts against social media accounts operated by finfluencers which may contain unlawful promotions.

The watchdog said that increasing numbers of young people are falling victim to scams online, with finfluencers often playing a part.

Around 62 per cent of 18 to 29-year olds follow social media influencers, with 74 per cent of this cohort saying they trust their advice.

FCA figures also show that almost 90 per cent of young followers have been encouraged to change their financial behaviour by influencers.

The UK watchdog advised consumers to check its warning list before making any decision about how to invest their money.

“Finfluencers are trusted by the people who follow them, often young and potentially vulnerable people attracted to the lifestyle they flaunt,” said Steve Smart, joint executive director of enforcement and market oversight at the FCA. “Finfluencers need to check the products they promote to ensure they are not breaking the law and putting their followers' livelihoods and life savings at risk.”

In May, the FCA brought charges against Emmanuel Nwanze and eight other finfluencers for their alleged involvement in an unauthorised investment scheme and the promotion of unlicensed financial services on Instagram.

This followed a warning by the FCA against unclear social media adverts. The regulator has said that ads cannot be misleading and must include balance and risk warning which enables people to make well informed financial decisions.

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