South Africas Financial Sector Conduct Authority FSCA is intensifying its efforts to regulate financial advice on social media platforms. The regulatory bodys annual report highlights growing concerns about the influence of financial influencers, or finfluencers, on consumer behavior and financial decision-making.
The FSCA recognizes the potential benefits of social media in promoting financial literacy. However, it has observed instances where influencers spread misinformation and promote fraudulent schemes. This trend poses significant risks to public financial well-being.
The report emphasizes the importance of seeking advice from authorized financial advisors rather than relying on social media personalities or celebrity endorsements. Popular platforms like TikTok have become hotbeds for dubious investment schemes and copy trading platforms, often promoted by influential figures.
Even well-known personalities such as Victor Matfield, Lucas Radebe, and Herschelle Gibbs have inadvertently endorsed schemes that later triggered FSCA warnings. This underscores the pervasive nature of misleading financial advice on social media.
Beyond the realm of influencers, the FSCA has identified several other online threats to financial security. Deepfake technology, which uses artificial intelligence to create realistic but fake videos or audio, is being employed to promote fraudulent schemes using the likeness of public figures.
