Twenty individuals are being interviewed under caution, and the FCA has issued 38 alerts against social media accounts operated by finfluencers. This comes as increasing numbers of young people, often influenced by finfluencers, are falling victim to scams.

Nearly two-thirds (62%) of 18- to 29-year-olds follow social media influencers, 74% of those said they trusted their advice and nine in 10 young followers have been encouraged to change their financial behaviour.

Steve Smart, FCA’s joint executive director of enforcement and market oversight, warned that finfluencers “need to check the products they promote to ensure they are not breaking the law and putting their followers’ livelihoods and life savings at risk”.

This action follows an earlier warning and guidance issued by the FCA, and high-profile action against nine individuals for promoting unauthorised trading schemes.

Laura Suter, director of personal finance at AJ Bell, commented: “We know that social media plays a huge part in people’s research of investment products, particularly among younger, newer investors.

“One in six investors used social media to either research investment, find new opportunities or get updates on existing investments – but this rises to half of all investors aged 18 to 24, according to the FCA’s Financial Lives survey.

“Research by AJ Bell’s Dodl investing app backs this up, with almost a third of novice investors saying they use social media platforms to research investment decisions, with Instagram and TikTok being the most popular. And the celebrity lure is clear, with more than two-fifths saying that a celebrity endorsement could influence them to buy a financial product and 17% already having done so.”

Ms Suter continued: “Not all financial content on social media is bad. The wealth of support and information available online can be a valuable resource for new investors.

“Finfluencers can make complex aspects of saving or investing accessible and engaging, helping people make better-informed financial decisions.

“However, there’s a darker side, with significant risks of finfluencers spreading misinformation or promoting high-risk behaviours, such as day trading individual stocks without adequately explaining the risks involved.”