Risky investment ads banned

THE City watchdog yesterday banned refer-a-friend and new-joiner bonuses on highrisk investments.

The Financial Conduct Authority (FCA) said under the rules, marketing firms must also have ‘appropriate expertise’ and conduct ‘better checks’ before they can advertise risky investments to savers.

The regulations are part of an effort by the FCA to prevent consumers being sucked into investment schemes and losing all their money. It has previously been criticised for being too reactive, acting only after savers had already lost significant amounts of money in risky schemes with flashy adverts.

The rules will not yet apply to crypto assets like bitcoin, as the FCA is waiting for Parliament to confirm how it wants crypto to be regulated.

But the regulator repeated its warning that anyone who invests in crypto should be prepared to lose all their money.

Rocio Concha, of consumer rights group Which?, said ‘it is good to see the FCA putting new rules in place that will see firms having to more clearly communicate the risks involved’.

But she added that the Government needed to use its Online Advertising Programme to require online platforms such as Facebook and Google, and others, to ‘introduce processes that protect consumers’.