The Financial Conduct Authority has ordered FreeTrade to take down all of its social media influencer posts over concerns that they could tempt vulnerable people into making unwise investments.
The FCA has repeatedly warned the commission-free stockbroking app about its paid for promotions and decided to take action after an influencer used by the company provided consumers with the impression that they could reduce debt by following the steps she had taken and use the firm as a mechanism to make money.
In its ruling, the FCA says: "The Authority considers this to be misleading as there are no guarantees that any investment will result in positive gains in the short or long term. Consumers already in debt are likely to be particularly vulnerable to this."
In addition, a TikTok video which was posted to an Instagram story on the influencer’s profile promoted the benefits of using Freetrade to engage in investment business but did not include the required risk disclosure.
States the FCA: "FreeTrade did not have appropriate oversight of the influencer’s financial promotion which would have allowed the Firm to identify and request the removal of the TikTok video posted."
Despite an appeal by the firm, the watchdog has ordered Freetrade to remove all paid for sponsored influencer advertisements and posts across all social media platforms,
including Instagram, TikTok, Facebook and YouTube.
Freetrade currently counts over one million registered users on its platform, representing a nearly 600% increase in 18 months, with client assets exceeding £1bn.
A spokesperson for Freetrade, says: “We are committed to upholding the highest standards, ensuring that we act in the best interests of our customers and treat them fairly.”