The Competition and Markets Authority (CMA) has announced new rules to make the posting of fake Independent Financial Adviser reviews online illegal to help to protect the public. The Government has been concerned about the issue for some time, but now has the power to crack down.
We fully support the initiative. It’s important that people should be able to trust Independent Financial Adviser reviews and testimonials, especially since peoples life savings are involved. We have testimonials on our website which are taken from clients who have written in to thank us for our service or posted reviews on other platforms.
For example, on Facebook, we have 26 clients reviews.
On Google, we have 65 clients reviews (all five star reviews)!
On Vouched For, we now have over 240 client reviews. This is the main system we use rather than Trustpilot or any of the others because Vouched For specialises in Independent Financial Adviser reviews and searches. Clients need to verify their e mails to Vouched For before any review is posted which means we can rely on the veracity of the reviews.
Firms falling foul of the new rules could be fined up to 10% of their global turnover, which is a significant deterrent. The new rules will make it illegal to write and submit a false review, to facilitate a false review and to allow reviews on your website without checking that they are genuine.
These new measures will come quickly after the introduction of the new Online Harms bill and demonstrates further commitment by the government to strengthen consumer protection measures.
The FCA has also confirmed that it cracked down on over 200 financial promotions in 2021. That means it felt the need to intervene because the rules were being breached. In particular the FCA intervened to remove adverts which appeared to offer inducements for investments.
In the first quarter of this year, they have intervened to close down over 80 promotions, slightly up on last year. The majority of these related to Claims Companies and lending offers including peer to peer lending. It appears that the offending promotions tended to claim to offer “benefits” and that the majority were online adverts on social media. Interestingly, 36% of referrals came from the general public, 35% from the FCA themselves and 15% from advisers.
The FCA are also said to be looking to close existing loopholes in the Financial Promotions Exemptions Orders, which allows the rules not to apply to high net worth or financially sophisticated clients on a self-certification basis.
On the downside however, the FCA revealed that they have only investigated two allegations of large scale “boiler room” investment fraud over the past two years as part of operation Broadway which was set up back in 2015. That’s not a lot of proactive investigation given the widespread growth in investment fraud activity over the same period.