FSA warns on social media financial promotions

The FSA says financial firms must ensure they provide appropriate risk warnings when using new media such as social networking sites, blogs and forums to promote products and services.

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FSA warns on social media financial promotions

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With banks increasingly turning to sites such as Facebook and Twitter, as well as smartphone applications, to promote their wares, the watchdog has reiterated that its rules focus on content not medium, meaning that new media is covered in the same way as old.

In February, the FSA conducted a review of around 30 Twitter and facebook pages and visited a variety of forums. It found "good and poor" practices, with some promotions lacking the appropriate risk warnings.

Other promotions, while not very specific about products or services, nevertheless went beyond the definition of 'image advertising' prompting the FSA to speculate that firms "may not have considered these factors to meet the definition of a financial promotion and therefore have not applied the relevant communication rules".

With new media often dating more quickly than traditional channels, the FSA says firms need to regularly review their output. It also calls on companies to consider whether, for example, Twitter, with its character limit, is suitable for promotions.

With the social Web still maturing, the watchdog says it will continue to monitor its use and "take action where appropriate".

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