Financial Sector Conduct Authority Targets Social Media Influencers in South Africa

The Financial Sector Conduct Authority (FSCA) of South Africa is set to intensify its monitoring of social media influencers in the financial sector, aiming to protect consumers from potential harm and misinformation.

The Financial Sector Conduct Authority (FSCA) of South Africa has announced a new initiative to closely monitor the activities of financial influencers on social media platforms. This move is part of a broader strategy to safeguard consumers from the risks posed by misinformation and scams perpetuated by these influencers.

In its annual regulatory actions report, the FSCA emphasized the significant influence that social media personalities, often referred to as “finfluencers,” can have on consumer behavior. While some finfluencers have positively contributed to financial literacy and market participation, there are growing concerns about the spread of misinformation and the promotion of dubious financial schemes.

The FSCA has observed instances where finfluencers have misled the public, sometimes intentionally, resulting in financial losses for their followers. The report highlighted the prevalence of scams on platforms like TikTok, where high-yield investment programs, copy trading, and forex platforms are commonly promoted. Notably, celebrities such as Victor Matfield, Lucas Radebe, and Herschelle Gibbs have been involved in promoting schemes that later attracted FSCA warnings.

In addition to the influence of finfluencers, the FSCA’s report addressed other online threats, including deepfake scams and impersonation of legitimate financial service providers. The advent of artificial intelligence (AI) and rapid software development has made it easier for fraudsters to create convincing fake content, posing a significant risk to the public.

The FSCA has identified multiple instances of fraudsters impersonating its officials and other legitimate financial entities. These scammers solicit funds using sophisticated methods, often promising unrealistic returns and using social media platforms like Telegram and WhatsApp to reach potential victims.

The FSCA urges the public to verify the legitimacy of any entity offering trading or investment services through official channels. The regulator is committed to adapting its enforcement methods to keep pace with the evolving tactics of financial criminals, emphasizing the importance of protecting consumers in an increasingly interconnected and technologically advanced world.